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that the caller’s assessment of the situation was inaccurate, i.e., there
was no fraud.
[9] (a) What other parties, if any, should be notified in addition to the
bank? (b) What concerns do you have about notifying the external
auditors?
[10] (a) What pressures or factors will executives use to encourage
accounting managers and staff to go along with this type of situation? (b)
What arguments can you use to resist those pressures? (c) How does one
determine whether a company is aggressively reporting, but still in the
guidelines of GAAP, versus fraudulently reporting financial information?
PROFESSIONAL JUDGMENT QUESTIONS
It is recommended that you read the Professional Judgment Introduction
found at the beginning of the book prior to responding to the following
questions.
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ACC 546 Case 4.1 Enron Corporation Andersen LLP
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1)What were the business risks Enron faced, and how did those risks
increase the likelihood of material misstatement in Enron’s financial
statements?