Word: enronize
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Some telecom companies are getting a second look, partly because more than a few use Arthur Andersen, Enron's auditor, but also because many achieved their once spectacular growth partly by immediately recognizing revenue from long-term contracts, analysts say. Qwest has received the most attention because its merger with US West opened the door to other accounting issues. Qwest has denied that it did anything wrong. "Think about a bottle of wine," former SEC chairman Arthur Levitt said in a speech two years ago. "You wouldn't pop the cork on that wine before it was ready. But some...
...financial world shaking from the Enron scandal, many investors are viewing with fresh skepticism the bookkeeping methods of a range of companies, including even blue chips that are widely admired and accused of nothing illegal. Some of the companies that investors point to are American Airlines, the insurer American International Group, Coca-Cola, Electronic Data Systems, General Electric, IBM, J.P. Morgan Chase and Xerox...
...Enron's unraveling can be traced to investors' first whiff of "off-balance-sheet" partnerships that hid billions of dollars of the company's liabilities. By the time Enron crashed, it was primarily a trading firm. It had relatively few hard assets to cushion its fall when business faltered and hidden debts came due. The risks aren't nearly so great at asset-rich companies like Tyco and GE. But, as with Enron, seasoned analysts have trouble determining whence, exactly, they derive their profits...
Since the Enron fiasco blew wide open, the influential Moody's Investors Service has requested additional information from some 4,000 companies that use accounting methods that Moody's believes make it harder to judge their creditworthiness. Companies are also deciding on their own that confusing books just aren't worth it. Last Wednesday, Bank of America went to great lengths to explain a $418 million gain in the fourth quarter from a subsidiary set up last year to deal with problem loans. The gain resulted from tax savings after bad loans were shifted to the subsidiary. Not wanting...
...Mart, which filed for Chapter 11 bankruptcy protection last week, announced on Friday that it was looking into internal accounting issues. The company offered no details. But the accounting getting closest scrutiny in the wake of Enron generally falls into three categories...