What are special purpose entities (SPEs)?
A) Fictitious organizations formed to perpetrate a financial statement fraud
B) Business interests formed solely to accomplish some specific task or tasks
C) Bodies formed to establish audit reporting standards and rules
D) Independent audit boards set up to ensure that financial statements are verified

Question

Quizplus · Accepted Answer

Special purpose entities (SPEs) are business interests formed solely to accomplish some specific task or tasks. They are often set up to isolate specific risks or assets from the parent company. While they have been used in financial statement frauds in the past, this is not their primary purpose or function.

What Are Special Purpose Entities (SPEs)