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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: Thomas Mercer-Hursh who wrote (50391)2/15/2002 12:56:25 PM
From: Mike Buckley  Read Replies (3) of 54805
 
Thomas,

Obviously they are aware of it at some level ... but if those millions ... out of $100 billions ... are characterized in some reasonable way

You're characterizing the off-balance sheet transactions as sufficiently small that they should be viewed as a detailed level that board members should be held accountable for not knowing about those "details." If they were of such relatively small detail, why are they at the core of the demise of Enron? And if they are at the core of Enron's demise, why is it that the board didn't know about them in sufficient detail. Why shouldn't we hold the board accountable for not knowing about them?

and the company's auditors have certified the validity of those characterizations, then there is no reason to expect the Directors to know the details.

The board approved hiring the auditor while at the same time approved hiring the same firm to provide much more profitable business services. It's not as if the board was requring a totally independent audit. Ultimately, the responsibility comes back to the board on virtually everything. That's where the buck stops.

I wish it were illegal to use the same firm to audit financial statements and provide other services. I don't like the fact that my other investments are in companies whose board allows audits that aren't completely independent.

--Mike Buckley
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