From: tony tinker (tony.tinker@GMAIL.COM)
Date: Fri Jun 02 2006 - 15:20:42 EDT
Sorry to be slow in replying Jerry. While insiders might be a good source, they tend to be exceptional and rare (most people are are "on the gravy train" or they are suckered into believing they are doing god's work). The SPE's weren't actually audited by Enron's auditor (Arthur Andersen) but by KPMG. Note that the latter knew about the fraud, kept the information from Arthur Andersen (who was then lynched) and then KPMG picked up all for Arthur Andersen's client -- with Justice Department tacit blessing. That's what they call "real" business strategy (KPMG style). No doubt it will be written up as a HBS case study, for classes when we return back to sleezier times. Fraternally, TT On 5/31/06, glevy@pratt.edu <glevy@pratt.edu> wrote: > Hi Tony, > > Thanks for this. I like the clever way you used the pre-existing > subject line. Since Fred asked a macro question, I'll ask a micro > one. > > As a practical matter for workers and unions trying to find the > "dead bodies" in the SPE's, perhaps what is needed are "moles"? > I.e. secret alliances with clerical workers or "disgruntled former > employees" who have or can obtain evidence of the SPE's and > other accounting and administrative improprieties. > > In solidarity, Jerry > > > > > First, many colleagues have, over the years, pleaded with > > progressive accountants to give them a clear answer to a simple > > question, "How do we find the dead bodies buried in financial > > statements?" In Enron, we see why there is not straightforward: Enron's > > accountants, auditors and consultants (KPMG and Arthur Andersen) buried > > bodies elsewhere (in Special Purpose Entities called SPE's). > -- Professor Tony Tinker Co-Editor: Critical Perspectives on Accounting Co-Editor: The Accounting Forum Fellow of the Association of Chartered Certified Accountants Baruch College at the City University of New York Box B:12:236 One Baruch Way New York, NY 10010-5585 USA Email: Tony_Tinker@baruch.cuny.edu Tel: 646 312 3175 Fax: 646 312 3161 CPA 2005 Conference: http://aux.zicklin.baruch.cuny.edu/cpa2005/ Editorial Office: http://www.baruch.cuny.edu/research/editorial_offices.htm Blog on Baruch College: http://evaluatingbaruchcollege.blogspot.com/
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