The most important guideline that t

The most important guideline that the authoritative bodies implemented for SPEs, the so-called 3 percent rule, proved to be extremely controversial. This rule allowed a company to omit an SPE’s assets and liabilities from its consolidated financial statements as long as parties independent of the company provided a minimum of 3 percent of the SPE’s capital. Almost immediately, the 3 percent threshold became both a technical minimum and a practical maximum. That is, large companies using the SPE structure arranged for external parties to provide exactly 3 percent of an SPE’s total. The remaining 97 percent of an SPE’s capital was typically contributed by loans from external lenders, loans arranged and generally collateralized by the company that created the SPE.
Many critics charged that the 3 percent rule undercut the fundamental principle within the accounting profession that consolidated financial statements should be prepared for entities controlled by a common ownership group. “There is a presumption that consolidated financial statement are more meaningful than separate statements and that they are usually necessary for a fair presentation when one of the companies in the group directly or indirectly has a controlling financial interest in the other companies. Business Week chided the SEC and FASB for effectively endorsing the 3 percent rule.
Because of a gaping loophole in accounting practice. Companies can create arcane legal structures, often called special-purpose entities (SPEs). Then, the parent can bankroll up to 97 percent of the initial investment in an SPE without having to consolidate it… The controversial exception that outsiders need invest only 3 percent of an SPE’s capital for it to be independent and off the balance sheet came about through tumbles by the Securities and Exchange Commission and the Financial Accounting Standards Board.
Throughout the 1990s, many companies took advantage of the minimal legal and accounting guidelines for SPEs to divert huge amounts of their liabilities for off-balance sheet entities. Among the most aggressive and innovative users of the SPE structure was Enron, which created hundreds of SPEs. Unlike most companies, Enron would arrange for a third party to invest the minimum 3 percent capital required in an SPE and then sell assets to that SPE. The SPE would finance the purchase of those assets by loans collateralized by Enron common stock. In some cases, undisclosed side agreements made by Enron with an SPE’s nominal owners insulated those individuals form and losses on their investments and, in fact, guaranteed them a windfall profit. Even more troubling, Enron often sold assets at grossly inflated prices to their SPEs, allowing the company to manufacture large “paper” gains on those transactions.
Enron made only nominal financial statement disclosures for its SPE transactions and those disclosures were typically presented in confusing, if not cryptic, language. One accounting professor observed that the inadequate disclosures that companies such as Enron provided for their SPE transactions meant that, “the nonprofessional (investor) has no idea of the extent of the (given firm’s) real liabilities. The Wall Street Journal added to that sentiment when it suggested that Enron’s brief and obscure disclosures for its off-balance sheet liabilities and related-party transactions “were so complicated as to be practically indecipherable.
Just as difficult to analyze for most investors was the integrity of the hefty profits reported each successive period by Enron. As Sherron Watkins revealed in the letter she sent to Kenneth Lay in August 2001, many of Enron’s SPE transactions resulted in the company’s profits being inflated by unrealized gains on increases in the market value of its own common stock. In the fall of 2001, Enron’s board of directors appointed a Special Investigative Committee chaired by William C. Powers, dean of the University of Texas Law School, to study the company’s large SPE transactions. In February 2002, that committee issued a lengthy report of its findings, a document commonly referred to as the Powers Report by the press. This report discussed at length the “Byzantine” nature of Enron’s SPE transactions and the enormous and improper gains those transactions produced for the company.
Accounting principles generally forbid a company from recognizing an increase in the value of its capital stock in its income statement… The substance of the Raptors (SPE transactions) effectively allowed Enron to report gains on its income statement that were….. (attributable to) Enron stock, and contracts to receive Enron stock, held by the Raptors.
In fact, several months earlier, Andersen representatives had become aware of Enron’s rapidly deteriorating financial condition and become deeply involved in helping the company’s executives cope with that crisis. Andersen’s efforts included assisting Enron officials in restructuring certain of the company’s SPEs so that they could continue to qualify as unconsolidated entities. Subsequent press reports revealed that in February 2001, frustration over the aggressive nature of Enron’s accounting and financial reporting decisions caused some Andersen officials to suggest dropping the company as an audit client.
On December 12, 2001, Joseph Berardino testified before the committee on Financial Services of the U.S. House of Representatives. Early in that testimony, Berardino freely admitted that members of the Enron audit engagement team had made one major error while analyzing a large SPE transaction that occurred in 1999. “We made a professional judgment about the appropriate accounting treatment that turned out to be wrong.” According to Berardino, when Andersen officials discovered this error in the fall of 2001, they promptly notified Enron’s executives and told them to “correct it.” Approximately 20 percent of the $600 million restatement of prior earnings announced by Enron on November 8, 2001, was due to this item.
The remaining 80 percent of the earnings restatement involved another SPE that Enron created in 1997. Unknown to Andersen auditors, one-half of that SPE’s minimum 3 percent “external” equity had been a result, that entity did not qualify for SPE treatment, meaning that its financial data should have been included in Enron’s consolidated financial statements from its in the fall of 2001, they immediately informed Enron’s accounting staff. Andersen also informed the company’s audit committee that the failure of Enron officials to reveal the source of the SPE’s initial funding could possibly be construed as an illegal act under the Securities Exchange Act of 1934. Berardino implied that the client’s lack of candor regarding this SPE exempted Andersen of responsibility for the resulting accounting and financial reporting errors linked to that entity.
Berardino’s testimony before Congress in December 2001 failed to appease Andersen’s critics. Over the next several months, Berardino continually found himself defending Andersen against a growing torrent of accusations. Most of these accusations centered on three key issues. First, many critics raised the controversial and longstanding “scope of services” issue when criticizing Andersen’s role in the Enron debacle. Over the final few decades of the twentieth century, the major accounting firms had gradually extended the product line of professional services they offered to their major audit clients. A research study focusing on nearly 600 large companies that released financial statements in early 1999 revealed that for every $1 of audit fees those companies had paid their independent auditors, they had paid those firms $2.69 for nonaudit consulting services. These services included a wide range of activities such as feasibility studies of various types, internal auditing, design of accounting systems, development of e-commerce initiatives, and a varied assortment of other information technology (IT) services.

ผลลัพธ์ (แอฟริกา) 1:

Die belangrikste riglyn dat die gesaghebbende liggame geïmplementeer vir Spes, die sogenaamde 3 persent reël, bewys uiters omstrede wees. Hierdie reël toegelaat om 'n maatskappy met bates en laste 'n SPE's van sy gekonsolideerde finansiële state laat solank partye onafhanklik van die maatskappy het 'n minimum van 3 persent van die hoofstad se SPE. Byna onmiddellik, die 3 persent drumpel geword beide 'n tegniese minimum en 'n praktiese maksimum. Dit is, groot maatskappye met behulp van die SPE struktuur gereël vir eksterne partye presies 3 persent van die totale 'n SPE se lewer. Die oorblywende 97 persent van die 'n SPE Capital is tipies bygedra deur lenings van eksterne leners, lenings gereël en in die algemeen collateralized deur die maatskappy wat die SPE geskep.
baie kritici aangevoer dat die 3 persent Reël sny die fundamentele beginsel Binne die rekeningkundige professie wat gekonsolideerde finansiële state. moet bereid wees om vir entiteite beheer deur 'n gemeenskaplike eienaarskap groep. "Daar is 'n vermoede dat gekonsolideerde finansiële state is meer sinvol as afsonderlike state en dat hulle gewoonlik nodig vir 'n billike aanbieding toe een van die maatskappye in die groep, direk of indirek 'n beherende finansiële belang in die ander maatskappye. Week berispe die SEC en FASB vir besigheid effektief aansluit by die reël 3 persent.
As gevolg van 'n gapende leemte in rekeningkundige praktyk. Maatskappye kan arcane wetlike strukture, wat dikwels genoem spesiale doel entiteite (Spes) te skep. Dan kan die ouer up finansier tot 97 persent van die aanvanklike belegging in 'n SPE sonder om dit te konsolideer ... Die omstrede uitsondering dat buitestaanders moet belê slegs 3 persent van hoofstad se 'n SPE vir dit om onafhanklik te wees en van die balansstaat gekom deur. Securities and Exchange Commission tuimel deur die Financial Accounting Standards Board en die.
Regdeur die 1990's, het baie maatskappye het die voordeel van die Minimal Legal en rekeningkundige riglyne vir Spes om groot bedrae van hul buite-balansstaat laste vir entiteite lei. Een van die mees aggressiewe en innoverende gebruikers van die SPE struktuur was Enron, wat honderde Spes geskep. Anders as die meeste maatskappye, sou Enron reël vir 'n derde party tot die minimum 3 persent kapitaal vereis 'n SPE bates te belê en dan verkoop aan dat SPE. Die SPE sou die aankoop van die bates te finansier deur lenings collateralized deur Enron gemeenskaplike voorraad. In sommige gevalle, onbekende kant ooreenkomste gemaak deur Enron met 'n SPE se nominale eienaars geïsoleerde individue vorm en verliese op hul beleggings en, in werklikheid, gewaarborg hulle 'n meevaller winste. Selfs meer kommerwekkend, Enron dikwels verkoop bates teen uiters hoë pryse om hul Spes, sodat die Maatskappy aan Groot "Paper" winste op daardie transaksies te vervaardig.
Enron gemaak net nominale Finansiële state Bekendmakings vir sy SPE transaksies en dié onthullings is tipies Aangebied in verwarrend ,. Indien nie kriptiese, taal. Een rekeningkundige professor waargeneem dat die onvoldoende onthullings dat maatskappye soos Enron verskaf vir hul SPE transaksies beteken dat, "die professioneel (beleggers) het geen idee van die omvang van die werklike laste die (gegee firma se). The Wall Street Journal bygevoeg dat sentiment wanneer dit voorgestel dat Enron se kort en onduidelik Bekendmakings vir sy buite-balansstaat laste en verwanteparty-transaksies "was so ingewikkeld As prakties onduidelijk. Wees
net so moeilik om te ontleed vir die meeste beleggers was die integriteit. van die stewige winste berig elke opeenvolgende tydperk deur Enron. As Sherron Watkins geopenbaar in die brief wat sy gestuur het om Kenneth Lay in Augustus 2001, het baie van SPE transaksies Enron se gelei tot die maatskappy se winste word opgeblaas deur ongerealiseerde winste op stygings in die markwaarde van sy eie gewone aandele. In die herfs van 2001, die direksie Enron se aangestelde n Spesiale ondersoekende komitee onder voorsitterskap van William C. Powers, dekaan van die Universiteit van Texas Law School, groot SPE transaksies van die maatskappy se bestudeer. In Februarie 2002 het die komitee uitgereik 'n lang verslag van sy bevindinge, 'n dokument wat algemeen na verwys as die Powers Verslag deur die pers. Hierdie Verslag breedvoerig bespreek die "Bisantynse" Aard van SPE transaksies Enron en die enorme en onbehoorlike winste daardie transaksies wat vir die maatskappy.
Rekeningkundige beginsels algemeen verbied 'n maatskappy van die erkenning van 'n toename in die waarde van sy kapitaal Stock in sy inkomstestaat ... Die. stof van die Raptors (SPE transaksies) effektief toegelaat Enron om verslag oor sy winste inkomstestaat wat was ... .. (toeskryfbaar aan) Stock Enron en Enron kontrakte Stock, gehou deur die Raptors ontvang.
In werklikheid, 'n paar maande vroeër, Andersen. verteenwoordigers het bewus van Enron se vinnig verslegtende finansiële toestand geword en word diep betrokke in die help bestuurders van die maatskappy se hanteer dat krisis. Pogings Andersen se ingesluit help Enron amptenare in die herstrukturering van sekere Spes die maatskappy se sodat hulle kon voortgaan om as ongekonsolideerde entiteite kwalifiseer. Daaropvolgende Press verslae aan die lig gebring dat in Februarie 2 001, frustrasie oor die aggressiewe aard van Enron se rekeningkundige en finansiële verslagdoening besluite veroorsaak Sommige Andersen amptenare om voor te stel die weglating van die maatskappy as 'n Oudit kliënt.
Op 12 Desember 2 001, Joseph Berardino getuig voor die Komitee oor Finansiële Dienste. van die Amerikaanse Huis van Verteenwoordigers. Vroeg in die getuienis, Berardino vrylik toegelaat dat lede van die Enron ouditaanstelling span een groot fout gemaak het, terwyl die ontleding 'n groot SPE transaksie wat plaasgevind het in 1999. "Ons het 'n professionele oordeel oor die toepaslike rekeningkundige behandeling wat blyk te wees verkeerd is. "Volgens Berardino toe Andersen amptenare ontdek hierdie fout in die val van 2001, het hulle dadelik Enron se uitvoerende kennis gestel en hulle vertel om te" korrigeer. "Ongeveer 20 persent van die $ 600,000,000 herstatering van vorige verdienste deur Enron aangekondig November 8, 2001. , te wyte was aan hierdie item.
Die oorblywende 80 persent van die verdienste herstatering betrokke ander SPE dat Enron geskep in 1997. Onbekend aan Andersen Ouditeure, een helfte van daardie SPE Minimum 3 persent "eksterne" Equity het gevolg was dat Entiteit het. kwalifiseer nie vir SPE behandeling, wat beteken dat sy finansiële data moes gewees het ingesluit in finansiële state Enron se van sy in die herfs van 2001, het hulle dadelik ingelig Enron se rekeningkundige personeel. Andersen ook ingelig van die maatskappy se ouditkomitee dat die mislukking van Enron amptenare na die bron van die aanvanklike befondsing van die SPE se openbaar moontlik vertolk kan word as 'n onwettige daad onder die Securities Exchange Act van 1934. Berardino geïmpliseer dat 'n gebrek aan eerlikheid die kliënt se oor hierdie SPE vrygestel. Andersen van die verantwoordelikheid vir die gevolglike rekeningkundige en finansiële verslagdoening foute gekoppel aan daardie entiteit.
getuienis Berardino se voor die Kongres in Desember misluk Andersen se 2001 Critics paai. Oor die volgende paar maande, Berardino voortdurend homself te verdedig teen 'n groeiende Andersen stortvloed van beskuldigings. Die meeste van hierdie beskuldigings gesentreer op drie belangrike kwessies. Eerstens, baie kritici het die omstrede en jarelange "omvang van dienste" probleem wanneer kritiseer rol Andersen se in die Enron-debakel. Oor die laaste paar dekades van die twintigste eeu het die groot ouditeursfirmas geleidelik uitgebrei die produk lyn van professionele dienste wat hulle aangebied om hul groot oudit kliënte. 'N Navorsingstudie fokus op byna 600 groot maatskappye wat finansiële state vrygestel in die vroeë 1999 die lig gebring dat vir elke $ 1 van ouditgelde dié maatskappye het hul onafhanklike ouditeure betaal het, het hulle die maatskappye betaal $ 2,69 vir nonaudit raadgewende dienste. Hierdie dienste sluit in 'n wye verskeidenheid van aktiwiteite soos haalbaarheid studies van verskillende tipes, interne ouditering, ontwerp van rekeningkundige stelsels, die ontwikkeling van e-handel inisiatiewe, en 'n verskeidenheid van verskillende ander inligtingstegnologie (IT) dienste.