The Cases of Enron and Bernard Madoff Go Beyond a Question

question 41

Multiple Choice

The cases of Enron and Bernard Madoff go beyond a question of ethics because in both cases ________.

• A) laws were clearly broken
• B) many people were hurt
• C) billions of dollars were involved
• D) no harm was intended and they had good reasons for what they did

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Definitions:

Acquisition-Date

The specific date on which one entity gains control over another, which is crucial for recognizing and measuring the assets acquired, liabilities assumed, and any noncontrolling interest.

Control Premium

An additional amount that a buyer is willing to pay over the current market price to acquire a controlling interest in a company.

Subsidiary

A subsidiary is a company that is controlled by another company, known as the parent company, usually through ownership of more than half of the subsidiary's voting stock.

Acquisition Method

A set of accounting procedures used during a merger or acquisition to consolidate the financial statements of both companies into a single set of financials.