No. of Recommendations: 1
Its sad that Enron was able to hide its losses in special accounting entities that fully complied with FASB accounting requirements (according to Arther Andersen). The FASB seems slow to plug this gaping loophole in accounting rules.

Here's a link to the FASB website.

They seem to be aware of the need to change, but so far their proposals to close the loopholes (increasing outside equity requirements for special accounting entities from 3% to 10%) seem terribly inadequate.

I'm sure investors oppose any means to hide debts and losses from investors. Special accounting entities for that purpose should be outlawed. A 3% equity requirement seems ridiculous; 10% is still way too small.
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