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New CCH Book Examines Enron Issues From Many Angles: Auditing/accounting, Corporate Governance, Disclosure, Business Culture

(RIVERWOODS, ILL., October 31, 2002) – CCH INCORPORATED (CCH), a leading provider of tax and business information and software has published Enron and Beyond–Technical Analysis of Accounting, Corporate Governance, and Securities Issues. This new title examines the substantive financial, accounting, management, legal and ethical issues surrounding the Enron collapse. ($75, 444 pages. For more information or to order, call 800 248 3248 or visit the CCH Online Store at onlinestore.cch.com.)

Co-editors Julia K. Brazelton and Janice L. Ammons, of Quinnipiac University, have assembled an insightful panel of co-authors to examine the multitude of issues raised by the Enron debacle. They dissect topics ranging from business culture to auditor independence, from corporate governance to retirement plans, from the role of market watchdogs to the role of internal auditors and from the use of derivatives to the deregulation of the utility industry.

The book provides analysis and insights that will be helpful to accounting and business professionals, lawmakers and the general public as they seek to plug loopholes, impose new controls and prevent future "Enrons."

Enron and Beyond is presented in 12 chapters, each exploring a different topic and written by an expert author. All but the introductory chapter conclude with a set of stimulating "Questions to Consider," making the book very suitable for use in business courses.

Chapters include:

The Enron Saga: Key Players, Dates and Events, by Janice L. Ammons and Julia K. Brazelton, introduces the major players, diagrams the special entities and transactions involved and establishes a timeline of key events for Enron. It includes the complete text of Sherron Watkins’ warning to Kenneth Lay as an appendix.

Accounting for Derivatives, by Arlette C. Wilson, Taylor Professor of Accounting at Auburn University, presents a concise explanation of how derivatives are typically used, how Enron relied on derivatives to accomplish its profit objectives and the historical and current rules on accounting for derivatives.

Financial Engineering with Special Purpose Entities, by Bala Dharan, J. Howard Creekmore Professor of Management at the Jones Graduate School of Management, Rice University, reviews the origins of special-purpose entities (SPEs) as genuine financial instruments and discusses how SPEs were used by Enron and others as financial engineering tools to achieve dubious accounting objectives.

Generally Accepted Auditing Standards and the Enron Audit, by Robert Semenza, of Quinnipiac University, presents some of the major accounting issues involved in the Enron matter as they relate to generally accepted auditing standards, including working papers and working paper retention, identification of related-party transactions, auditor communications with the audit committee of the client’s board of directors, the concept of professional skepticism, materiality and independence.

Independence of Accountants Performing the Attest Function, by Janice L. Ammons and Julia K. Brazelton, questions the impact on independence risk in the Enron-Arthur Andersen engagement and addresses how factors like corporate audit committees, audit firm policies and audit firm culture may have failed to sufficiently mitigate independence risk.

Impact of Enron on the Internal Auditing Profession, by Douglas E. Ziegenfuss, Professor and Chair of the Accounting Department at Old Dominion University, describes events in Enron’s internal auditing department, developments in the internal auditing profession prior to Enron and predictions regarding the impact that Enron will have on the internal auditing profession into the future.

Utility Industry Restructuring: Did Enron Make It Happen?, by Kathleen E. Magruder, Vice President of Government Affairs for The New Power Company, examines the impact Enron has had on the restructuring of the utility industry.

Redefining the Roles of the Watchdogs, by Margaret Rosenfeld, of the law firm Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P., focuses on the roles of the securities market "watchdogs" and examines the most prominent proposed regulatory and legislative reforms.

Enron and Wall Street, by Mark Cheffers, CEO and founder of www.accountingmalpractice.com and www.directormalpractice.com, reviews the issues arising for groups that both form and influence Wall Street activities: financial press, distinguished commentators, investment banks and financial institutions, analysts and brokerage houses, the SEC and other regulators. The chapter also describes how the accounting and auditing professions were instrumental in providing the "cover" needed to permit misrepresentations.

Corporate Self-Governance and the Corporate Checks and Balances System, by Patrice Luoma, Associate Professor of Management at Quinnipiac University, focuses on corporate governance issues as they pertain to the Enron situation and on the perspectives of various parties that have voiced recommendations. It provides an overview of the legal requirements for a board of directors and the roles of managers and shareholders, and discusses the state of governance today and factors that can affect governance effectiveness.

Employee Compensation and Retirement Plan Issues at Enron, by Stephen G. Driggers, executive compensation and employee benefits attorney with Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P., deals with executive compensation and employee retirement plans. The chapter identifies Enron’s compensation philosophy, including its plans for annual incentives and long-term financial inducements and presents some proposed changes in rules pertaining to compensation and benefits.

Enron’s Corporate Culture and Ethics, by John Dobson, author of two books and numerous articles on ethics and finance in academic journals, discusses the corporate culture and ethics associated with Enron’s fall. The chapter addresses the challenges faced by any corporate culture and explains why Enron’s corporate culture exacerbated these challenges. It examines American corporate culture and argues that Enron’s problems were a dramatic manifestation of a problem that exists throughout contemporary American corporations.

For more information or to order a copy of the 444-page Enron and Beyond: Technical Analysis of Accounting, Corporate Governance, and Securities Issues, call 800-248-3248 or visit the CCH Online Store at onlinestore.cch.com. Single copies are $75, plus applicable shipping, handling and tax. Quantity discounts and school adoption prices are available.

CCH INCORPORATED, headquartered in Riverwoods, Ill., was founded in 1913 and has served four generations of business professionals and their clients. The company annually produces more than 700 electronic and print products for the tax, legal, securities, human resources, health care and small business markets. CCH is a wholly owned subsidiary of Wolters Kluwer North America. The CCH web site can be accessed at cch.com. The CCH Federal and State Group Tax site can be accessed at tax.cchgroup.com.

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EDITOR’S NOTE: For members of the press, a complimentary copy of Enron and Beyond–Technical Analysis of Accounting, Corporate Governance, and Securities Issues is available by contacting Neil Allen at 847-267-2179 or allenn@cch.com.