Question

What role did the company's chief financial officer play in creating the problems that led to Enron's financial problems?

That case is about the Eron: Not Accounting for the Future

Answer 1

This is a common perception that the main person who led the debacle of Enron was its Chief Financial Officer of Enron and he was the kingpin in making the efforts from hiding the debs from investors. He created some special purpose entities for this purpose which are mainly some shell companies that are developed by the sponsor and funded by the different equity investors and debt financing firms. The main objective behind using these entities for Enron to use them to fulfil their debt goals. Chewco was one of these entities that were managed by the Enron management. Debts were collected by this entities which were provided by Enron and Chewco was structured in such a way that it can be shown as a joint venture in financial reporting. This facilitates the company to use the partnership interest in Chewco without having any debt on the financial reporting. This all was developed and conceived by the CFO of Enron