As I said, I didn’t really understand what happened with Enron; I understood just enough to make me feel unsettled.
The passage I read is: “The overriding basic principle of accounting is that if you explain the ‘accounting treatment’ to a man in the street, would you influence his investing decisions? Would he sell or buy the stock based on a thorough understanding of the facts? If so, you best present it correctly and/or change the accounting.”
If you’d like to read the full text of Sherron Watkins’s memo, read it here .
How about you? Can you think of examples when you found the right question or the right test to identify the right path? Often, I say to myself, “Do the loving thing.” That often helps.
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