FIN 590 Types and Components of Audits: Case one: Andrew Fastow (CFO)

Andrew Fastow was the CFO of Enron.

Fastow desgined the “off balance sheet” companies that were used to hide large amounts of debt from investors and lenders (Meglio, 2012).

This off balance sheet system of accounting allowed Enron to hide its debts and to maintain its stock price at a high level (Meglio, 2012). He directly contributed to the fraud and demise of Enron by devising a means to continue perpetrating fraud and maintain its appearance to the public.
Because this system worked well for a long time, Enron debt was allowed to escalate to tremendous levels and ultimately, the stockholders, employees, and lenders would be left with no means of collecting their money owed as the company was forced into bankruptcy (Meglio, 2012).

References
Enron’s Andrew Fastow: The Mistakes I Made

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