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Financial crisis is inevitable, especially when the whole economy is affected.There has been much furore in financial sphere over the recent revelation of misleading accounting techniques used by Lehman Bros.
An accounting trick, known as the Repo 105 aided financial relief to Lehman Brothers just before its supernova collapse. It now seems that the shenanigans spells used by them may cast a legal jeopardy for executives of Lehman and its auditors Ernst & Young.

The implosion of Lehman Brothers Holdings Inc. into the biggest bankruptcy in U.S. history in September 2008 led the financial meltdown that plunged the economy into the most severe recession since the 1930s, which now thankfully shows some signs of recovery.

How did they do it ?
After puffing itself with billions of troubled assets that couldn’t easily be sold, Lehman camouflaged its debt and financial condition by using the accounting gimmick, the examiner appointed by the bankruptcy court revealed in a 2,200-page report on a yearlong investigation.

The report also unveiled that Lehman put together complex transactions that allowed the firm to sell “toxic,” securities at the end of a quarter wiping them off its balance sheet when regulators and shareholders were examining it and then to quickly buy them back.
The “Repo” here means repurchase.

Now, Repo 105 has entered the list of names of vehicles for accounting tweaks, along with others like Raptor partnerships etc.
In the sagas of those two companies, the role of the accounting firms was central.

Here are some of the accounting scandals that came to light in recent years:

(a) AIG – Accounting of structured financial deals
(b) Bernard L. Madoff Investment Securities – Ponzi scheme run by Bernard Madoff. David G. Friehling was charged with securities fraud, aiding and abetting investment adviser fraud, and four counts of filing false audit reports with the Securities and Exchange Commission in regards to this Ponzi scheme. He faces up to 105 years in prison on all of the charges.[33]
(c) Anglo Irish Bank – hidden loans controversy
(d) Satyam Computers -  Falsified accounts

In the meltdown’s wake, Justice and the SEC launched wide-ranging investigations of companies across the financial services industry, believed to include insurer American International Group Inc. and mortgage giants Fannie Mae and Freddie Mac as well as Lehman. A year and a half after the financial crisis struck, charges haven’t yet come in most of the probes.Revealing Sensible Plans Of financial crisis

The Report doesn’t reach a conclusion on whether executives violated securities laws. It does say that the executives’ decision not to disclose the effects of its business judgments “does give rise to
colorable claims against the senior officers who oversaw and certified misleading financial statements.”

Colorable claims here implies that there appears to be sufficient evidence to support the awarding of civil damages in a trial.

The report says there also are colorable claims against the outside auditors, Ernst & Young, for “its failure to question and challenge improper or inadequate disclosures” in Lehman’s financial statements.

However, EnY said: “We never concluded our review of the matter, because Lehman went into bankruptcy before we completed our audit.”

These incidents certainly reiterate the value of accounting ethics, which have, in recent years gained currency due to the diverse range of accounting services and recent corporate collapses, attention has been drawn to ethical standards accepted within the accounting profession.

To conclude, unsecured loans can be very beneficial in a financial crisis, mainly due to them being risk-free regarding assets, they’re speedy in approval and their flexibility to suit almost any situation.

Read a related interesting article : Why Lehman Bros went bust; what it means for you