However, the application of the 3% independent ownership has been restructured to make SPEs much clearer to delineate between parent company ownership and independent ownership. Another major issue that arose out of the Enron scandal is the manipulation used by Anderson of derivatives. In a BBC report, Emma Clark explains, "If you dig deep enough into any financial scandal you can usually find a derivative or two to take the blame" (Callahan, npg). Derivatives are in fact financial products that derive their value from any underlying assets that a company might have. Enron, much like other companies used derivative trading in order to fully engage its business and reduce its business risks. Although it was actually profitable within its derivative trading, the accounting practices involved in calculating these profits allowed them to disguise heavy losses in its business sectors attributed to derivatives trading. Enron's case was especially severe "their dubious maneuvers involving derivatives were desgined to enhance the company's "accounting reality" at the expense of its true economic condition" (Callahan, npg). Therefore in the wake of these exploitations, the government has attempted to create many lega barriers to protect the investment of the general public. Regulations now encourage publicly traded companies to place more focus in the protection of their core financial practices rather than seek greater profits through diversification and derivative trading.

Another major issue in the Enron debacle was the lack of disclosure that was involved in the entirety of the accounting procedure. Under the auditing and accounting regulations of the time, Enron had no responsibility to disclose its financial documents for closer inspection to anyone other than its independent auditor. As a result, its claims could not be properly examined by others and thus were viewed as financially sound. This is especially true for financial arrangements that are made internally that involve "contingent liabilities." With greater disclosure in general, the loopholes of SPEs exploited by Enron would be instantly recognized and would be very hard to execute for the corporate party. The Financial Accounting Standards Board has placed greater emphasis on the use of uniform accounting...

Not only did billions of dollars in 401k retirement money collapse without any chance of being fully compensated, many other financial institutions were devastated by the events that followed Enron. In general, the blame can be spread across many different areas. Chiefly among these of course is the lack of unified and solid accounting policies in place to insure the general reliability of financial statements from publicly traded corporations. However, blame can also be laid at the feet of the board of directors who took little initiative to look into the mind bogglingly falsified balance sheets that Enron produced. Banking letdowns, derivatives trading and many other practices contributed to the overall fall of Enron and its results. Therefore blame cannot be applied at just the accounting flaws resulted from the Enron crisis, but also at many different facets of our financial world that was not ready to accept that one of the blue chip companies could collapse. In its wake, contemporary accounting as dramatically changed, and hopefully these changes were for the better. In the final analysis, the Enron debacle was a catalyst for Jickerling, Mark. "The Enron Collapse." CRS Report for Congress. 28 Mar. 2002.
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9267.pdf+accounting+issues+of+enron&hl=en&gl=us&ct=clnk&cd=6&client=firefox-a>.

Levitt, Aurther. "Accounting Lessons." Bigger than Enron. 13 June 2003. 21 Aug.

2006 http://www.pbs.org/wgbh/pages/frontline/shows/regulation / lessons/>.

Mundstock, George. "Enron's Special Purpose Entities." Discourse.net. 4 Feb.

2003. 21 Aug. 2006 http://www.discourse.net/archives/2006/07 / enrons_special_purpose_entities.html>.

Callahan, Gene. "In Defense of Derivatives." Reason online. 20 Feb. 2004. 21

Aug. 2006 http://www.reason.com/0402/fe.gc.in.shtml.