Which of the following actions was a key element of the Enron audit fraud?
A)Capitalizing line costs rather than expensing them.
B)Misrepresenting bribes from suppliers as a reduction of operating costs.
C)Shifting debt to off-balance sheet special entities.
D)Concealing large losses related to securities investments.

Question

Quizplus · Accepted Answer

Shifting debt to off-balance sheet special entities (such as the infamous "special purpose entities" or SPEs) was a key element of the Enron audit fraud. These entities were created to hide Enron's debt and inflate its reported earnings, leading to the company's eventual collapse.

Which of the Following Actions Was a Key Element of the Enron