1-17 Poor Corporate Governance Accounting scandals (Enron, WorldCom, Rite- Aid, HealthSouth, Global Crossing, Qwest, etc.) –Enron in 2001 In late 2001, Enron was one of the world s leading electricity, natural gas, communications and pulp and paper companies, with claimed revenues of nearly $101 billion in 2000 Using special purpose entities (SPEs) (also known as special purpose vehicle (SPV)) to hide debt which should be in its own books (by selling non-performing assets to SPEs) –WorldCom in 2002 The United States s second largest long distance phone company (after AT&T) Classify expenses as investments to enhance net income or even hide losses
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