Doc2005
Enron: The Smartest Guys in the Room
2005EssentialDocumentaryStart hereAn evening
Revenue recognition and off-balance-sheet vehicles can book profit that never arrives.
Mark-to-market accounting and off-balance-sheet vehicles, explained through the company that used both to book profit that never arrived. The reference point for any accounting-quality question you get asked.
Where it shows up in a roomWhere it shows up in a room
Any question about earnings quality or why cash flow matters more than profit has its best example here.
Doc2022
Skandal! Bringing Down Wirecard
2022Directed by James Erskine · Netflix
RecommendedDocumentaryIntermediateAn evening
When cash cannot be confirmed with the bank that holds it, the cash is the question.
A payments company in Germany’s leading index found to be missing €1.9 billion, told through the Financial Times reporters who spent years being sued, surveilled and reported to prosecutors by the market regulator. The lesson is how long a fraud survives when the people checking it are invested in its success.
Where it shows up in a roomWhere it shows up in a room
Asked how you would test whether reported cash is real, this is the case: confirm the balance with the bank holding it, never with the company.
Series2023
Madoff: The Monster of Wall Street
2023RecommendedSeriesStart hereA few evenings
Returns too smooth to be real are themselves the evidence.
Four episodes on the largest Ponzi scheme in history, and more usefully on the decade of people who spotted it and were ignored. Watch how the smoothness of the returns was itself the tell.
Where it shows up in a roomWhere it shows up in a room
It gives you a real answer to what you would look at first in a fund’s track record, which is a common buy-side screen.
Doc2017
The China Hustle
2017RecommendedDocumentaryIntermediateAn evening
A short seller does fieldwork because the filings are the thing in doubt.
Reverse mergers, auditor incentives and how a listed company can have almost no business behind it. The best primer available on why a short seller does fieldwork instead of reading filings.
Where it shows up in a roomWhere it shows up in a room
Asked how you would research a short, this is where the answer stops being a screen and starts being primary evidence.
Film1999
Rogue Trader
1999RecommendedFilmStart hereAn evening
One person holding both the trade and its settlement is the whole failure.
A single trader, an error account and a bank that could not reconcile its own positions. It is the origin story for most of the segregation-of-duties controls you will be trained on in your first week.
Where it shows up in a roomWhere it shows up in a room
Operations and risk interviews ask what controls are for. This answers it with a bank that no longer exists.
Doc2019
The Inventor: Out for Blood in Silicon Valley
2019Directed by Alex Gibney · HBO
RecommendedDocumentaryStart hereAn evening
A board that accepts a narrative has stopped doing diligence.
Theranos in one evening: a blood-testing company valued in the billions on a device nobody outside it had seen work. A diligence and governance failure rather than a markets one, which is why it belongs in venture, growth and board conversations. Watch who was asked to verify what, and who was never asked at all.
Where it shows up in a roomWhere it shows up in a room
Asked what you would diligence first in an early-stage company, the honest answer is the thing nobody has independently verified.
Series2022
The Dropout
2022Created by Elizabeth Meriwether · Hulu
RecommendedSeriesStart hereA few evenings
Diligence rarely fails at once. It fails one reasonable-sounding exception at a time.
Eight episodes dramatising Theranos from a first pitch to the newspaper investigation that ended it. Slower than the documentary and better on the mechanism: a board of eminent names with little laboratory expertise, a retail partner more afraid of missing out than of being wrong, and a validation that was always due next quarter. It is a drama, so take the facts from Bad Blood.
Where it shows up in a roomWhere it shows up in a room
Asked what a board is for, or what you would need to see before signing a commercial partnership, the retail partner storyline is that question answered badly in public.
BookCarreyrou
Bad Blood
John CarreyrouEssentialBookStart here
Secrecy presented as protecting the technology is the warning sign.
The Theranos investigation by the reporter who broke it. The documentary is the faster version; this is the one that shows how the evidence was actually assembled.
Where it shows up in a roomWhere it shows up in a room
It is the best answer to what you would verify independently, because it lists exactly what nobody verified.
Doc2021
WeWork: Or the Making and Breaking of a $47 Billion Unicorn
2021EssentialDocumentaryStart hereAn evening
An adjusted metric is an argument about what should not count.
A valuation story from first round to withdrawn IPO. Community adjusted EBITDA is the single best example of an adjusted metric built to flatter, and being able to explain it is worth an interview answer.
Where it shows up in a roomWhere it shows up in a room
Asked what you would adjust out of EBITDA and why, this gives you a real example of an adjustment that should never have been made.
BookSteer
The Signs Were There
Tim SteerEssentialBookIntermediate
The warning was usually in a footnote, years early.
Corporate failures traced back to the disclosure that flagged them years in advance. A forensic accounting course disguised as a collection of case studies.
Where it shows up in a roomWhere it shows up in a room
Asked what you read in a set of accounts first, naming a specific footnote and what it would tell you is a complete answer.
Series2018
Dirty Money
2018For the curiousSeriesStart hereA few evenings
Most corporate fraud is an incentive structure working exactly as designed.
An anthology where each episode is a self-contained corporate fraud, from emissions testing to payday lending. Good for breadth when you want a case nobody else in the room will raise.