Q&A Hero

Q: Which were not problems that resulted from WorldCom's high level of mergers? a. Merging billing systems was difficult b. Customer service concerns c. Collections suffered d. All of the above were problems

Q: The WorldCom board: a. Was known as "Bernie's Board". b. Consisted of experienced outsiders. c. Approved all loans to Ebbers before they were made. d. None of the above

Q: Who received the longest sentence in prison for their crimes? a. Andrew Fastow b. Jeffrey Skilling c. John Rigas d. Bernie Ebbers

Q: Who objected to WorldCom's practice of capitalizing ordinary expenses? a. Scott Sullivan b. Cynthia Cooper c. Bernie Ebbers d. Jack Grubman

Q: Which earnings management tool did WorldCom use?a. Transactional earnings managementb. Materialityc. Reservesd. Both a and ce. Both a and bf. a, b, and c

Q: How much did the WorldCom board loan Ebbers? a. $20 million b. $100 million c. $415 million d. $1.4 billion

Q: What was WorldCom's risk in relation to Mr. Ebbers' personal loans? a. Ebbers had conflicting business interests with WorldCom b. Embarrassment if the CEO did not repay his loans c. Loss of company control through creditor foreclosure on Ebbers' pledged shares d. The increase in the share price

Q: What would be the final merger for WorldCom? a. CompuServe b. GTE c. MCI d. Sprint

Q: What job did Bernie Ebbers hold while he was in Canada? a. Motel owner b. Junior high basketball coach c. Long distance operator d. None of the above

Q: Who said, "My actions caused my wife to go to prison"? a. Andrew Fastow b. David Delainey c. Jeffrey Skilling d. Ken Lay

Q: Who said, "I wish on my kids' lives I would have stepped up and walked away from the table that day"? a. Sherron Watkins b. Andrew Fastow c. Paula Reiker d. David Delainey

Q: Who said, "I considered [quitting] on a number of occasions. I was very well compensated. I didn"t have the nerve to quit"? a. Sherron Watkins b. Lea Fastow c. Paula Reiker d. David Delainey

Q: Who of the following people from Enron are still living as of 2010? a. Ken Lay b. Cliff Baxter c. Lea Fastow d. All of the above

Q: What happened to Mr. Skilling's case on appeal? a. Some of the guilty verdicts were partially reversed b. The verdicts and sentence were affirmed c. The U.S. Supreme Court found that the trial should have been held in another state d. The U.S. Supreme Court refused to hear the case

Q: How many years was Jeffrey Skilling sentenced to? a. 6 years b. 11 years c. 18.3 years d. 24.4 years

Q: Who said, "I am incredibly nervous that we will implode in a wave of accounting scandals"? a. Margaret Ceconi b. Cliff Baxter c. Jeffrey Skilling d. Sherron Watkins

Q: Who sold blocks of Enron stock in August and September 2001? a. Jeffrey Skilling b. Ken Lay c. Both a and b d. Neither a nor b

Q: How much did Enron's creditors receive? a. Nothing b. 18.3 cents on the dollar c. 50 cents on the dollar d. None of the above

Q: Who said, "We are on the side of angels"? a. Investigators for the SEC b. Prosecutors for the Justice Department c. Jeffrey Skilling and Lloyd Blankfein d. Both a and b

Q: How much were Enron board members paid? a. $25,000 per year b. They were not paid c. $3,000,000 per year d. None of the above

Q: What happened to Cliff Baxter? a. He was convicted of all charges b. He was acquitted of all charges c. He committed suicide d. Both a and c

Q: What happened to Ken Lay? a. He was acquitted of all charges b. He was convicted of all charges c. He was convicted of 8 of the 12 crimes he was charged with d. None of the above

Q: What happened to Andrew Fastow? a. He was convicted of fraud b. Nothing; he did nothing wrong c. He testified against Skilling and Lay d. Both b and c

Q: Who is Sherron Watkins? a. An Arthur Andersen auditor b. An employee of Fortune c. A former vice president of Enron d. None of the above

Q: Who said "Some would say the house of cards are falling"? a. Sherron Watkins b. Margaret Ceconi c. Jeffrey Skilling d. Bethany McClean

Q: Who was the CFO of Enron? a. Jeffrey Skilling b. Andrew Fastow c. Ken Lay d. John Olson

Q: What reason did Ken Lay give for Jeffrey Skilling's departure from Enron? a. He had another job b. He wanted to spend more time with his family c. He was fired d. None of the above

Q: Who of the following did business with Enron? a. Ken Lay's son b. Ken Lay's sister c. Both a and b d. Neither a nor b

Q: How much debt did Enron disclose? a. $5 billion b. $13 billion c. $38 billion d. None of the above

Q: How much debt did Enron really have? a. $5 billion b. $13 billion c. $38 billion d. None of the above

Q: How many off-the-book entities had Enron created? a. 125 b. 452 c. 1200 d. 3000

Q: What are SPEs? a. A form of gas energy b. Energy contracts c. Off-the-book entities d. None of the above

Q: What happened when John Olson issued a skeptical report on Enron? a. He was given a bonus b. He was fired c. He was recognized by the business press for his insight d. Both a and c

Q: What was Jeffrey Skilling's opinion of Jim Chanos? a. That he was insightful b. That he would like to hire him c. That he was an "a**hole" d. Both a and b

Q: What was Jeffrey Skilling's opinion of Bethany McLean? a. That she was unethical b. That she was a smart and skilled reporter c. That she did not understand Enron or its business d. Both a and c

Q: What did Ken Lay do when Bethany McLean was researching Enron? a. Called her editor and asked that she be removed from the story b. Answered all her questions c. Thanked her for Fortune naming Enron one of the 100 best companies to work for d. None of the above

Q: What type of revenues are reported using mark-to-market accounting? a. Oil sales b. Consulting services c. Energy sales contracts d. Energy services

Q: What did the sign in Enron's lobby read? a. The World's Premier Energy Company b. The Innovator c. The World's Leading Company d. None of the above

Q: Where was Enron incorporated? a. Houston, Texas b. Oregon c. Delaware d. New York

Q: How were Bausch & Lomb sales affected by its product recall in 2005? a. Its sales were not affected b. Sales dropped 28 percent c. Sales dropped 78 percent d. None of the above

Q: Which of the following has not been an issue for Bausch & Lomb? a. Its CEO claimed to have an MBA and did not b. One of its products resulted in eye infections c. Accounting issues in its Brazilian operations d. The failure to self-report issues to the SEC

Q: How did Bausch & Lomb compete with itself? a. It sold its own contact lenses on the gray market b. It had both wholesale and retail operations c. It sold lenses through physicians d. None of the above

Q: How low did FINOVA's share price dip? a. To $1.12 b. To $0.72 c. To $0.24 d. To $0.06

Q: What happened to FINOVA's share price when it announced a write-down of a loan and the retirement of Sam Eichefeld as CEO? a. The share price dropped $0.72 b. The share price dropped but rebounded before the end of the day c. The share price dropped from $32 to $19.98 in one day d. None of the above

Q: When did questions about FINOVA's numbers first arise? a. 1999 b. 2000 c. 2001 d. None of the above

Q: Who testified before Congress on the importance of ethics in business? a. Bernie Ebbers b. Franklin Raines c. Jeffrey Skilling d. Richard Scrushy

Q: Provide the accounting for the following: Operating Revenues: $10,000,000 Nonrecurring, non-operating gain: $4,000,000 Nonrecurring, non-operating loss: $8,000,000 Operating expenses: $6,000,000 a. EBITDA is no income b. GAAP is no income c. EBITDA is $4,000,000 d. None of the above

Q: Non-GAAP measures can be helpful: a. When a company has large equipment needs. b. When a company switched inventory evaluation methods. c. When a company has changed accounting practices. d. All of the above

Q: Pro forma numbers are: a. GAAP measures. b. Non-GAAP measures. c. Illegal under Sarbanes-Oxley. d. Both b and c

Q: Which of the following are used to smooth out earnings? a. Cookie jar reserves b. Expectations gap c. Spring-loading d. All of the above

Q: Soft charges or anticipated costs: a. Are a source of cookie jar reserves. b. Are the same as EBITDA. c. Are never used in acquisition accounting. d. All of the above

Q: Another name for large-charge restructuring is: a. Big bath. b. Spring-loading. c. Cookie jar reserves. d. All of the above

Q: Materiality:a. Is a standard for determining whether a financial event or issue must be reported.b. Is no longer part of GAAP.c. Is the reason EBITDA is now used.d. Is a physical technique for managing earnings.

Q: EBITDA is an acronym for: a. Earnings before I took depreciation for assets. b. Earnings before interest and debt adjustments. c. Earnings before interest and taxes decertified by the auditor. d. Earnings before interest, taxes, depreciation, amortization.

Q: Which is not a physical technique for managing earnings? a. Large-charge restructuring b. Inventory write-down c. Delayed invoices d. All of the above are physical techniques for managing earnings

Q: Who gave the famous "Numbers Game" speech? a. Warren Buffett b. Arthur Levitt c. Dennis Kozlowski d. Andrew Fastow

Q: In the Beech-Nut case, the executives at the time of the sales of adulterated apple juice: a. Did not know that there was a problem with the apple juice. b. Took no steps to cover up the juice problem. c. Were charged with violations of criminal statutes. d. Cannot be held responsible unless they actually bought the adulterated product. e. None of the above

Q: Which of the following is not an option for whistleblowers? a. Leaving the company and saying nothing about the issue b. Leaving the company and saying something upon leaving c. Staying with the company and saying nothing about the issue d. Staying with the company and revealing the problem to an internal source e. All of the above are possible options for whistleblowers

Q: Who was urged to take off his engineering hat and put on his management hat? a. Charles S. Locke b. Roger Boisjoly c. Bob Lund d. None of the above

Q: How many people were fired following the Challenger explosion? a. None b. One c. Two d. Three, including the CEO

Q: The CEO of NASA: a. Maintained that he never agreed to go ahead with the launch. b. Said that the rocket explosion would cost his company 10 cents per share. c. Both a and b d. None of the above

Q: Who was the engineer who wrote an internal memo on his concerns about the use of the rocket launchers in low temperatures? a. Allan McDonald b. Bob Lund c. Roger Boisjoly d. Morton Thiokol e. Charles S. Locke

Q: In the NASA Challenger case, what company built the rocket boosters? a. NASA b. Morton Thiokol c. Lockheed Martin d. Boeing

Q: What was Beech-Nut's fine? a. $100 million b. $50 million c. $2 million d. $140,000

Q: What was the former Beech-Nut CEO's sentence? a. Five years in prison b. Suspended sentence c. Suspended sentence plus fines plus probation d. 22 years

Q: How many felony counts did Beech-Nut plead guilty to? a. 22 b. 37 c. 110 d. 215

Q: Who is Zeev Kaplansky? a. Employee of Universal b. Beech-Nut's lawyer c. Beech-Nut's head of chemistry d. None of the above

Q: Who is Thomas Ward? a. Beech-Nut's purchasing manager b. Beech-Nut's CEO c. Beech-Nut's head of chemistry d. Beech-Nut's lawyer

Q: What did the FDA mean by saying that Beech-Nut played a "cat and mouse game" with the government? a. That Beech-Nut helped the FDA nab the supplier b. That Beech-Nut tried to hide the concentrate c. That Beech-Nut turned over the product but not its paper work d. None of the above

Q: Who wrote the "Johnny Appleseed" letter to the FDA? a. Charles Jones b. John Lavery c. Jerome LiCari d. Nils Hoyvald

Q: When Beech-Nut's CEO became aware of the problems with its juice supplier, he: a. Immediately canceled the contract and no longer used the product. b. Canceled future shipments only. c. Reported the problem to the FDA. d. None of the above

Q: Who is Nils Hoyvald? a. Beech-Nut's purchasing manager b. Beech-Nut's CEO c. Beech-Nut's head of chemistry d. Beech-Nut's general counsel

Q: Who was criticized for being "colored by naivet and impractical ideals"? a. Charles Jones b. John Lavery c. Jerome LiCari d. Nils Hoyvald

Q: Who was criticized for being "Chicken Little" and "not a team player"? a. Charles Jones b. John Lavery c. Jerome LiCari d. Nils Hoyvald

Q: Who is Charles Jones? a. Beech-Nut's purchasing manager b. Beech-Nut's CEO c. Beech-Nut's head of chemistry d. Beech-Nut's general counsel

Q: What was the standard Lavery imposed for changing the supplier? a. If there was any question as to whether the apple juice was fake b. If the employees could prove in a court of law that the concentrate was adulterated c. If other companies stopped using the concentrate d. If employees felt uncomfortable with the supplier

Q: When is it legal under federal law to sell a product that tastes like apple juice but is not apple juice? a. There is no such provision under federal law b. When the label discloses that the product is not real apple juice c. When the company is not generally a seller of apple juice d. None of the above

Q: When was the hold-harmless agreement signed? a. After the suspicions about the syrup content of the concentrate b. When the contract with the supplier was first entered into c. After the criminal cases d. None of the above

Q: What was Lavery's first step in dealing with the concentrate issues? a. Canceling the contract b. Ordering less concentrate c. Checking the supplier's facilities d. None of the above

Q: What was Lavery told in 1978 about the concentrate? a. That it was adulterated b. That it might not be made of real apples, but rather, of syrup and flavors c. That the concentrate had no problems d. None of the above