Question:

Describe the problems label each questions

Analyze the situation:

A. What significant internal controls were ignored when LJM1 was created?

B. How might Enron's harsh Performance Review Committee (PRC) have aided company executives in committing the fraud?

C. The fraud at Enron is one of several major financial statement frauds that occurred in current years (Qwest, Global Crossing, WorldCom, etc.). What are some factors that could describe why the falsifying of financial statements is occurring so frequently?

D. Consider you are a certified fraud examiner but enjoy investing in the stock market as an additional source of income. Upon doing research of Enron's stock, you notice that though its stock has a history of strong growth and a seemingly promising future, Enron's financial reports are unclear and, frankly, confusing. In fact, you can't even describe how Enron is making money. Could this lack of clarity in its financial reporting serve as a red flag in alerting you to the possibility of fraud at Enron? Why or why not?