A comment to my previous Enron post notes that the cause of the company's failure has little or no bearing on the legal strategy adopted by the prosecution. Maybe so; I'm even less of a lawyer than I am an accountant. But I suspect the case may nonetheless be publicly instructive about financial myth and reality.
Certainly
yesterday's testimony
gives me more reason to be hopeful about that. The prosecution's witness talks of huge losses that were hidden from public view by Skilling. Afterward, his attorney tells the press that there were no such losses.
If this keeps up, it will be impossible to avoid a discussion of the difference between earnings and cash, and that would have to take matters from the income statement to the cash flow statement and balance sheet, don't you think?
Who knows, we may eventually wind up with something as enlightening as the Pecora Commission. (I can dream, can't I?)
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