Identify how balance sheet quality and earnings quality were impaired in each of the following accounting scandals:
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Question:
Identify how balance sheet quality and earnings quality were impaired in each of the following accounting scandals:
Waste Management 1988 - Falsely increased the useful lives of long-lived tangible assets
Enron 2001 - Underreported balance sheet long-term debt
WorldCom 2002 - Capitalized rather than expensed expenditures to maintain transmission lines
AIG 2003 - Booked debt as revenue
Lehman Brothers 2008 - Sold toxic assets (i.e., financial investments) to other banks with a buyback agreement, removing the toxic assets from its books.
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