Answer questions briefly in approximately 150 words each.
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