Editing Creative accounting (section)

=== Parmalat's mis-accounted credit-linked notes ===
{{See also|Parmalat#Financial fraud (2002–2005)}}
Italian dairy giant [[Parmalat]] employed a number of creative accounting and wire fraud schemes before 2003 that lead to the largest bankruptcy in European history.<ref>{{Cite web|url=https://www.europeanceo.com/finance/europes-biggest-bankruptcy-remembered/|title=Europe's biggest bankruptcy remembered|website=www.europeanceo.com|language=en-US|access-date=2019-09-29}}</ref> It sold itself [[Credit-linked note|Credit-linked notes]] with the help of [[Merrill Lynch]] through a [[Cayman Islands]] [[special-purpose entity]] and over-accounted for their value on the balance sheet. It also forged a $3.9Bn check from [[Bank of America]].<ref>{{Cite web|url=https://www.marketwatch.com/story/parmalat-a-disaster-but-no-enron|title=Parmalat: A disaster, but no Enron|last=Goldstein|first=Steve|website=MarketWatch|language=en-US|access-date=2019-09-29}}</ref> The publicly listed company stated to investors that it had about $2Bn in liabilities (this figure was accepted by its auditors [[Deloitte]] and [[Grant Thornton International]]), but once audited more vigorously during the bankruptcy proceedings, it was discovered that the company's debt turned out to actually be $14.5Bn.<ref name=":2">{{Cite news|url=https://www.theguardian.com/business/2004/feb/17/corporatefraud.parmalat|title=Police net widens on Parmalat family|last1=Tran|first1=Mark|date=2004-02-17|work=The Guardian|access-date=2019-09-29|last2=agencies|language=en-GB|issn=0261-3077}}</ref> This massive debt was largely caused by failed operations in Latin America and increasingly complex financial instruments used to mask debt—such as Parmalat "billing itself" through a subsidiary called Epicurum.<ref>{{Cite book|url=https://books.google.com/books?id=94_sAgAAQBAJ&q=parmalat+largest+bankruptcy&pg=PA231|title=Governance and the Market for Corporate Control|last=Teall|first=John L.|date=2014-02-25|publisher=Routledge|isbn=978-1-317-83471-7|language=en}}</ref> It was also discovered that its CEO [[Calisto Tanzi]] had ordered the creation of shell accounts and diverted 900M Euros worth into his private travel company.<ref name=":2" />