Lehman

Case Study Major fuss The major problem with the Lehman brothers was their desperation. The executives of this faithful were so desperate to trick investors and credit coverage agencies, that they meshed in techniques to cook the books to sell up their schemes. To be much exact, Lehman entered into agreements known as Repo 105. This repo is referred to as an chronicle dodge use to shift the assets away Lehmans books in make pass for a promise to buy back the securities at a subsidy days later. In this agreement, the company entered into agreements with banks in the cayman Islands to mete out the bank their toxic securities amounting up to $50 billion with the arrangement that they would reacquire them within a short time. not only did they takings $50 billion from the bank, they used the pecuniary resource to pay off some of their debt items, thus making the firm, as a whole, wait better towards the end of the year. This scandalization around mirrored tha t of Enron, yet these series of events affected the country and our spherical economy (Rappaport). This scandal not only placed a damper on the reputation of Lehman Brothers, but also caused potential size up clients to stake guess the reputation of well-known audit firm, Ernst and Young.

Ernst and Young helped Lehman Brothers cover up its financial condition for more(prenominal) than seven days from 2001 to 2008, while collecting more than $185 one thousand thousand in fees from the firm. Reports do stated that Ernst and Young directly facilitated an accounting sleight of surpass that burnished [or polished] the securities f irms balance sheet. In the audit firms defen! se, reps responded stating that there was no factual or legal flat coat to bring a learn against the firm and it would vigorously throw the claim. Also, they stated that Lehmans failure filings were in no similarity to the accounting issue at hand and that Lehmans accounting standards were always in treaty with Generally Accepted story Principles (GAAP)...If you want to get a full essay, order it on our website: BestEssayCheap.com

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