The Enron scandal has significantly shaped current financial reporting practices. It led to the creation of new regulations and standards to prevent such frauds in the future. The Sarbanes-Oxley Act was passed in 2002 in response to the Enron scandal, which increased the accountability of auditing firms to limit conflicts of interest. It also led to the creation of the Public Company Accounting Oversight Board (PCAOB) to oversee the audit of public companies. Moreover, it emphasized the importance of corporate ethics and increased transparency in financial reporting.
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Financial statements do not always tell the entire story about a company. Accounting methods and financial reporting require an executive to decipher...
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The book captures your attention from the moment you begin to read Chapter One's You Can't Always Trust the Numbers. Headlines throughout the past few decades have told horror stories about corporations that have "tweaked" the books just enough to make it look like they were in the black and doing fine… but in reality they were just one step away from financial disaster. Remember the Enron story? It took years for accountants and prosecutors to sort out all of that ill-fated company's spurious transactions
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