Financial Risk Manager Part 1
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Q.123 In the history of financial disasters, there have been instances where companies have used questionable accounting practices to misrepresent their financial health to investors. These practices often involved disguising the size of borrowings, thereby creating a false impression of financial stability. Among the following cases, which one is known for such practices?
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TTanishq
Explanation:
Enron Corporation is infamous for its accounting scandal that led to its downfall. The company took on large loans but disguised them as oil futures contracts. This allowed Enron to avoid reporting these borrowings on its balance sheet, creating a false impression of financial stability and hiding its true debt levels from investors and regulators.
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