Lehman

Case Study Major difficulty The major problem with the Lehman brothers was their desperation. The executives of this faithful were so desperate to trick investors and credit reportage 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 machination use to shift the assets away Lehmans books in tabulator 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 caiman 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 cash 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 passably mirrored th at of Enron, yet these series of events affected the country and our globose economy (Rappaport). This scandal not only placed a damper on the reputation of Lehman Brothers, but also caused authorization inspect clients to stake guess the reputation of well-known take stock firm, Ernst and Young.

Ernst and Young helped Lehman Brothers cover up its financial condition for more than seven days from 2001 to 2008, while collecting more than $185 jillion in fees from the firm. Reports do stated that Ernst and Young directly facilitated an be sleight of surpass that burnished [or polished] the securities firms balance sheet. In the audit firms defense, reps responded stating that there was no factual or legal flat coat to! bring a title 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 unanimity with Generally Accepted story Principles (GAAP)...If you want to get a full essay, order it on our website: OrderEssay.net

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