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Forensic Accounting, Forensic Techniques, and Fraud Detection Copyrighted 2001 D. Larry Crumbley, ... - page 210 / 352

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© D.L. Crumbley

Enron’s management figured an ingenious method of overriding the double-entry of accounting. They simply ignored it.

It remains the simplest, most elegant financial fraud. Enron created special-purpose entities (SPEs) and pledged Enron stock – just pieces of paper.

If the SPE was successful, they recognized income.

When the SPE had huge losses they issued more paper. Debts were filed off-balance sheet in the partnerships.

  Source: Joe Anastasi, The New Forensics, John Wiley & Sons, 2003, p. 92-93.

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