Q&A Hero

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

Q: Who is Lavery? a. CEO of Beech-Nut b. Plant manager for Beech-Nut c. Employee in Beech-Nut's purchasing department d. Director of Research and Development for Beech-Nut Nutrition

Q: What were the rumors around the industry about the concentrate products? a. That there might be adulteration b. That there would soon be a price increase c. There were no rumors; the concentrate was the best the industry had seen d. None of the above

Q: Who is Jerome LiCari? a. CEO of Beech-Nut b. Plant manager for Beech-Nut c. Employee in Beech-Nut's purchasing function d. Director of Research and Development for Beech-Nut Nutrition

Q: How far below market price were Interjuice's prices? a. 15% b. 20% c. 50% d. 30%

Q: Which was not a business pressure Beech-Nut was feeling at the time of the juice controversy? a. Heavy debt b. 15% market share c. Old plant in need of maintenance d. Beech-Nut had all of the above threats

Q: What is the length of Mr. Madoff's sentence?a. 10 yearsb. 18 yearsc. 25 yearsd. 150 years

Q: Who was trying to have an investigation into Madoff's operation launched as of 2005? a. The SEC b. Harry Markopolos c. Congress d. NASD

Q: Which of the following individuals knew nothing about Bernie Madoff's Ponzi scheme?a. Frank DiPascalib. Harry Markopolosc. The SECd. All of the above knew about his Ponzi scheme

Q: Where was Bernie Madoff's secretive operation that had his computer and program for his investment techniques?a. Off-shore in the Cayman Islandsb. In West Palm beachc. On the 17th floor of his New York officesd. In Switzerland

Q: Lehman Brothers (now bankrupt) was able to use an accounting strategy known as Repo 105 to spin debt off its books so that it appeared to be less leveraged than it was. Which of the following is correct?a. Lehman's accounting strategy was similar to that of Enron.b. Lehman's accounting strategy was similar to that of WorldCom.c. Lehman's accounting strategy was similar to that of Bausch & Lomb.d. Lehman's accounting strategy was similar to that of Tyco.

Q: What term did the Westland/Hallmark Meat Company employees have to use in their processing work? a. Stander b. FDA approved c. Authorized d. Department of Education approved

Q: How were the workers at Westland/Hallmark Meat Company compensated?a. By the hourb. By the number of cows processedc. By the number of cows slaughtered for meat productiond. By the evaluation of the federal agencies that regulate their production facilities

Q: Which of the following are more likely to break the law? a. Companies that are experiencing a downturn in sales b. Companies that have had 7 consecutive quarters of losses c. Companies that are high earnings performers d. Companies that have just had a rapid changeover in leadership

Q: What explanation did Krispy Kreme offer for not meeting its earnings targets in 2004? a. The Atkins Diet craze b. A change in accounting that was required by the SEC c. A change in leadership d. A change in the franchise structure of the company

Q: Ronald Zarrella, the CEO of Bausch & Lomb in 2000, had to apologize for what? a. The company not meeting its sales targets b. Falsifying his credentials c. The problems with ReNu contact lens solution d. The MoistureLoc recall