Enron was a massive failure, partly because of its size, partly because of its complexity, partly because the controls to protect the integrity of capital markets failed, and especially because of the massive greed and collusion of key participants. Management failed, auditors failed, analysts failed, reditors/bankers failed, and regulators failed. The intersection of multiple failures sent a signal of structural problems. Suddenly, the consequence of deceptive financial data resulting from structural failure in the capital markets was not merely a hypothetical possibility. The speed with which the system responded indicates the importance of fairly presented financial information.

1. A S H O K A 4 B
ENRON SCANDAL
ENRON SCANDAL
ENRON SCANDAL
By,
By,
Chayan Patra;
Chayan Patra;
Dhananjoy Mondal;
Dhananjoy Mondal;
Kheya Mondal;
Kheya Mondal;
Puja Chetani;
Puja Chetani;
Rintu Das;
Rintu Das;
Srimanta Ghanta;
Srimanta Ghanta;
Swati Kumari Singh
Swati Kumari Singh

2. A S H O K A 4 B
Enron began as northern natural gas company, organized in
Omaha,Nebraska,1930 by three other companies.
Enron was founded in 1985 as a merger between Houston natural gas
and Inter North ,both relatively small regional companies.
Kenneth lay , the former chief executive officer of Houston natural gas,
became CEO, and the next year won the post of chairman.
North America light &power company and united light &railways
company.
Enron employed approximately 20,000 staff with claimed revenues of
nearly $101 billion during 2000.
Rise of Enron
Rise of Enron
Rise of Enron

3. A S H O K A 4 B
The creation of a SPE.
Mark-to-market accounting.
Lapse of corporate governance
in Enron Corporation
Causes of the Enron
Causes of the Enron
Scandal
Scandal

4. On August 15, 2001 Sherron Watkins, an Enron vice president to Lay expressing
concerns about Enron’s accounting practices.
On August 22, 2001 Sherron Watkins meets with Lay and gives a letter in which se
says that Enron might be an elaborate Hoax.
On February 14, 2002 she testifies before congressional panel against Skilling and Lay.
The Down Fall
The Down Fall

6. Accountability
Transparency
Fairness
Stakeholder
Pillars of
Pillars of
Corporate Governance
Corporate Governance

7. The Sarbanes Oxley (SOX) Act of 2002 came in response to
highly publicized corporate. Financial scandals earlier that
decade.
The act created strict new rules for accountants, auditors,
and corporate officers and Imposed more stringent record
keeping requirements.
The act also added new criminal penalties for violating
securities laws.
Enactment of
Enactment of
Enactment of
Sarbanes Oxley Act (SOX)
Sarbanes Oxley Act (SOX)
Sarbanes Oxley Act (SOX)

8. CONCLUSION
CONCLUSION
CONCLUSION
4500 employees lost their jobs.
Citizen’s trust in the American economic system was destroyed
Kenneth Lay died before sentencing due to heart attack.
Jeffrey Skilling was imprisoned for 24 years and 4 months, fined
$45 million.
Andrew Fastow pled guilty to two counts of wire and securities
fraud, and agreed to serve a ten-year prison sentence.
David Duncan pleaded guilty and became a witness for the
prosecution.