{"id":"asset_d48ca37046bc","type":"text/markdown","category":"text","name":"04-enron-worldcom-2002.md","size_bytes":3853,"title":"04 enron worldcom 2002","description":"An analytical essay examining the Enron and WorldCom accounting scandals of 2001–2002 and the regulatory response through Sarbanes-Oxley. It details the specific frauds involved, the Act's provisions, and argues whether the legislation addressed the root causes of corporate malfeasance or merely its symptoms.","extracted_text":"# We Regulated the Paperwork and Left the Incentives: Enron, WorldCom and Sarbanes-Oxley\n\nEnron filed for bankruptcy in December 2001 with $63 billion in assets. WorldCom\nfollowed in July 2002 with $107 billion, having capitalised $3.8 billion of\nordinary operating expenses as capital expenditure — an accounting fraud so\nelementary that its scale is the only sophisticated thing about it. Between them\nthey erased tens of billions of shareholder value and the retirement savings of\nthousands of their own employees, who had been encouraged to hold company stock\nin their 401(k)s and were locked out of selling as it fell.\n\nEnron was the more inventive. Special purpose entities kept debt off the balance\nsheet while retaining its economics. Mark-to-market accounting let the firm book\nthe entire projected profit of a twenty-year contract in the quarter it was\nsigned, which meant growth had to accelerate perpetually to keep reported\nearnings rising. Arthur Andersen signed the accounts while earn","attributes":{},"usable_for":["understanding sarbanes-oxley's actual mechanisms","period analysis of early 2000s corporate governance","argument about incentive structures versus procedural controls"],"provenance":"original-work","provenance_note":"An original analytical essay by its author.","kind":"analytical essay","reliable_for":"The author's argument about whether Sarbanes-Oxley addressed structural incentive problems in corporate governance and the evidence it cites.","describe_v":6,"price_sats":{"card":0,"full":200},"content_available":true,"available":true,"retained_offered":false,"embed_offered":false,"licences":{"single-task":{"sats":200,"grants":"use for one task, then let go"},"retained":null,"embed":null}}