The topic of this week’s discussion is not directly related to Chapter 11. It is rather a topic that wraps up this course. Read the following three articles carefully and address the questions below.
Repo 105: Lehman's 'Accounting Gimmick' Explained (NPR) https://www.npr.org/sections/money/2010/03/repo_105_lehmans_accounting_gi.html%20 Lehman Case Hints at Need to Stiffen Audit Rules (NYTimes) https://www.nytimes.com/2011/07/29/business/in-lehman-case-a-hint-that-audit-rules-are-lacking-floyd-norris.html Ernst &Young Agrees to Pay a9 Million in Lehman Settlement Click for more options (WSJ) (in the first attachment)
Address two questions below (Your initial post should be approximately 200-300 words):
Why do you think was EY not held liable for the incident as much as investors wished (You can discussed it in relation to what we talked about in Lesson 4)? Lesson 4 is related to "Module C" (powerpoint of ModuleC is the 4th attachment, the textbook is in the third attachment) In the NYTimes article above, the judge said "the fact that Lehman’s accounting for the Repo 105 transactions technically complied with the rule does not mean that Lehman’s financial statements complied with GAAP.” What do you think it means?
Each student will make at least one original post by Thursday 11:59 PM, ET, and react to at least two of your peers’ posts by Sunday 11:59 PM, ET.