The Ethics Of Enron Scandal

The Ethics Of Enron Scandal
The Dilemma Often an ethical dilemma does not appear abruptly but can rather be the proverbial slow boiling of a frog as they say. Enron was an
economic powerhouse in the early to late 90's. Its financial success was due to a great understanding of the opportunities available in the energy market
due to deregulation across the country. The company was founded on sound financial principles which turned to illegal recklessness over time. Key
personnel succumbed to unethical pressures which built up slowly over time. Since the public's trust of professionals in the accounting industry is
paramount to society (Mastracchio et. al. 2015) this paper will discuss the ethics not exhibited in the Enron scandal which came to a head in 2001.
History
In 1985 Houston Natural Gas merged with Internorth and renamed itself Enron. In 1990 Jeffrey Skilling was hired to focus on trading in
commodities. Skilling later becomes the president of Enron in 1997. Andrew S. Fastow is named as Enron's financial chief in 1998. According to
the New York Times Fastow created partnerships which the company claimed were to buy company assets which were not performing very well. We
now have come to realize that these partnerships were instituted in order to conceal the company's debt and give an image of overinflated profits to
the public (2006). In 2000 through 2000 there was shuffling around of key leadership. Skilling resigned citing personal reasons only. Six days later
Sherron Watkins approaches CEO
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The Enron Scandal Of A Company
To invest your whole savings in a company through stock is an important risk almost everyone will do in their lifetime. When investing in a
company you see their financial records and can see if the company's stock value will go up if you invest in them making your money increase as
well. What if this company falsifies their records and in a couple of days the company and its stock value go from $90 per share to just a penny per
share. You lose your money just because a company cheated and stole your money.
This is what the Enron scandal did to thousands of people. It could have been stopped if more forensic accountants in the world are checking on the
companies. This way they don't lie about their stock value. Forensic accountants are in ... Show more content on Helpwriting.net ...
This also shows the terrible affect it has had on the stock market, the people who are tied with these companies, and how forensic accountants are badly
needed to prevent future problems with false financial records. To be informed on the problems and solutions you must first look into the company that
started the fraud in the first place.
Enron was a major natural gas company, which was created in 1985. Enron was audited by the public accounting firm Arthur Andersen. It has not been
confirmed when Enron began falsifying its records, but it is roughly around 1995 (Douglas O. Linder). Enron falsified its records by taking past
assets and claiming them as current. This made the company 's financial records look very good with a large income coming into the company.
These reports made Enron the fifth largest company in the Fortune 500. The report was shown to the public stock and shareholders. From this report
many people would invest into Enron because of its large source of income. As people invested in the company it increased the company 's value.
Enron then decided to use its employees 401(k)'s to its advantage and invest these 401(k)'s into the stock of Enron. Although the company 's records
were in great shape, the company was losing lots of money to its ever increasing competition from the market. People got suspicious of how the
company became so big. This is what began the

Enron : Enron And Enron Scandal Essay
Enron was one of the largest energy, commodities, and services company in the world. It was founded in 1985 and based in Huston, Texas. Before
its bankruptcy on December 2, 2001, there are more than 20,000 staff and with claimed revenues nearly $101 billion during 2000. Enron was the rank
16 of Fortune 500 in 2000. In 2001 it revealed that Enron's financial report was planned accounting fraud, known since as the Enron scandal. In the
Enron scandal, Enron used fraudulent accounting practices to cover its fraud in reporting Enron's financial information. Its purpose is to hide the
significant liabilities from its financial statement. Enron tried to make its financial report with great revenue to attract more people to invest it. It
continued to spread the information that advance its stock price continued to rise. In fact, Enron was with a large amount of liabilities and loss. The
key executives of Enron continually spread the fake information of Enron's financial report and kept encourage the people to buy its stock. They
knew the real financial condition of Enron. They knew the outlook of Enron is not good, so they sold their stocks secretly to generate profit before
the company bankruptcy. After the people knew that Enron had a large amount of loss, the stock price was drop from 90 dollars per share to just
pennies. In addition, the bankrupt of Enron had a great effect in the California energy market. The bankrupt of Enron made California had a shortage of
electricity

Accounting Scandals And The Enron Corporation
Accounting scandals have happened in numerous companies. In one major case, the firm filed for bankruptcy, and many of its workers lost their jobs,
savings, and investments from stocks. This major epidemic happen at Enron, an energy firm stationed in Houston, Texas founded by Kenneth Lay in
1986 (Frontain). On December 2, 2001, the Enron Corporation, an apparently strong and booming business, fell to an all–time low by shocking the
world when it filed for bankruptcy protection. Many people were left unemployed and without their savings. Because of this scandal, numerous effects
were left on the accounting profession since the scandal was traced to the company's financial reports, accountants, and auditors (Buckstein Part 2, p.1).
Enron ... Show more content on Helpwriting.net ...
The employees were considered magicians because of their expert ability to handle the numbers in such a manner which made it look easy and precise.
As Enron began to rely on the trading process, a few changes had to be made to their accounting techniques. Skilling implemented a technique called
mark–to–market accounting where the present value of projected revenue is understood, and the expected costs of a contract become expenses after
the contract is signed (Frontain). As part of the company's annual report, the losses in market value and unexpected gains of continuing contracts had to
be recorded. In 1999 the stock rose fifty–nine percent, and in 2000 it rose again another eighty–seven percent. Because of the rise in stock, Enron
began to lose operation money by taking on more companies than they could handle. Nonetheless, with the help from its auditor, Arthur Andersen, it
appeared stable. Enron used prepaid loans which helped the company raise cash flow; however, these loans were not included on the balance sheets.
In 2001 over five billion dollars were invested in prepaid loans to raise cash flow and eliminate the debt (Frontain).
More investigation began after the discovery of Enron paying Andersen about fifty million dollars in 2000 for his auditing and consultant work. About
three–thousand of its partnerships did not make their way onto the balance sheets leaving

The Enron and Worldcom Scandals
E. Boos – Week 2– Assignment
February 17, 2013
The Enron and WoldCom Scandals
ENRON
1. The segment of Enron's operations that got them into difficulties had several parts. They published misleading financial reports. They could not meet
their bridge financing commitment with Barclay Bank because outside investors were not found. Because of this, they restated activities of JEDI and
Chewco SPEs so they could be retroactively consolidated into Enron's accounts. The SPEs helped to hide the inaccurate accounting records. Enron's
legal department wrote contracts that helped provide a cover for misuse of funds regarding the SPEs. Future revenue was reported as current revenue.
Stocks were paid with promissory ... Show more content on Helpwriting.net ...
5. Ken Lay was chairperson of the board. He reassumed the position of CEO after Skilling resigned. As CEO he oversaw all of Enron's activities.
Lay and Whaley directed Causey to sell the Raptor SPEs. The sale price of was privately negotiated between Fastor, on behalf of Enron, and Kopper
on behalf of LJM2. Lay did not interfere when Arthur Andersen directed Enron to record the buyout excess money as income. He knowingly allowed
fraudulent activities and false information to be included in the financial reports. This was unethical. The Powers Report identifies seven questionable
accounting issues concerning the sale of the Raptors (Brooks, 2007). 6. The board of directors did not insist that full disclosure of Enron's earning be
made available to the public and the shareholders. They allowed inaccurate reports to be published. Since they did not challenge management
involvement in fraudulent activities, this meant the shareholders interests were not protected (Brooks, 2007).
9. Conflict of interest concerning SPE activities occurred because Enron employees were active in managing certain SPEs. Losses were not reported
in end of year reports to offset other nonprofitable dealings. Arthur Andersen did not report all of the earnings and helped Enron cover up losses. When
Andrew Fastow, wanted to manage

Accounting Scandals And Enron Accounting Scandal
Introduction:
In this research paper I will be examining accounting scandals, specifically the Enron Accounting Scandal. First, I will be exploring the history of
Enron. Then I will be going into further depth on what accounting issues Enron faced and then I will be explaining what a derivative is. Finally yet
importantly, I will consider the different types of Accounting Fraud following a conclusion.Accounting Scandals are born due to collective greed and
corporate arrogance. In the case of Enron there was a lot of euphoria before the downfall. Stock prices soared and Enron was seen as one of the most
innovative companies in the world. However, things seemed too good to be true. Eventually the company was exposed for its wrongdoing which led
to the collapse. Many more of such cases were exposed during the 2008/2009 recession such as the Lehmann Brothers scandal. As mentioned earlier,
many financial scandals have happened in the past but none of those are nearly as bad as the scandals when it gets to trading in derivatives.
Summary of the Enron Accounting Scandal:
In the year of 1985 after the federal deregulation of natural gas pipelines, Enron was born. The company was formed by merging the following two
companies: Houston Natural Gas and InterNorth, a Nebraska pipeline company.
In the process of the merger, Enron incurred massive debt and, as the result of deregulation, no longer had exclusive

The Scandall : The Failure Of The Enron Scandal
The Enron Scandal is the bankruptcy of the Enrol Corporation, one of the America's biggest company, that suddenly happened in 2001. This happened
quite unexpected, as the company has officially expanded rapidly over the last decade, decimating its value and reaching the 7th position in the ranking
of the most important US multinationals.
However, within a very short time, the Enron shares, all of them considered solid, lost all their value, ranging from $ 86 to 26 cents, burning around $
60 billion in three months. The failure of Enron affected many workers because a proposal had been made for them to buy the shares of the company
but they could not do anything to recover from the disaster.
The management of the company is obviously one of the main reason for the failure of Enron because they fooled the accounts. The first great lesson
to be learned from what has happened is that the fake budget, which is already severe for unlisted companies, becomes for those listed, which can have
devastating effects on the efficiency and functionality of financial markets. Then when the company started to loose, the top executives of the
company, have had time to sell their shares before the crack, making huge profits.
Kenneth Lay, was the CEO of Enron Corporation and helped to develop this firm in one of largest companies of America. But he a big part of the
worth of the firm was based on shady accounting practices and not recorded losses in the financial statement. In 2001 many

Case Study Enron Scandal
CASE 3 Enron: Questionable Accounting Leads to Collapse
Once upon a time, there was a gleaming headquarters office tower in Houston, with a giant Tilted вЂ•EвЂ– in front, slowly revolving in the Texas sun.
Enron's suggested to Chinese feng shui practitioner Meihwa Lin a model of instability, which was perhaps an omen of things to come. The Enron
Corporation, which once ranked among the top Fortune 500 companies, collapsed in 2001 under a mountain of debt that had been concealed through a
complex scheme of offbalance –sheet partnership. Forced to declare bankruptcy, the energy firm laid off four thousand employees; thousand more lost
their retirement saving, which had been invested in Enron stock. The company's shareholders lost tens of ... Show more content on Helpwriting.net ...
Delivering bad news could result in the вЂ•deathвЂ– of the messenger, so problems in the trading operation, for ~ample, were covered up rather than
being communicated to management. Enron Chair Ken Lay once said that he felt that one of the great successes at Enron was e creation of a
corporate culture in which people could reach their full potential. He said at he wanted it to be a highly moral and ethical culture and that he tried to
ensure that people did in fact honor the values of respect, integrity, and excellence. On his desk was an Enron paperweight with the slogan вЂ•Vision
and Values.вЂ– Despite these intentions, however, ethical behavior was not put into practice. Instead, integrity was pushed the side at Enron,
Particularly by top managers. Some employees at the company believed that nearly anything could be turned into a financial product and, with the aid
of complex statistical modeling, :traded for profit. Short on assets and heavily reliant on intellectual capital, Enron's corporate culture rewarded
innovation and punished employees deemed weak.
ENRON'S ACCOUNTING PROBLEMS
Enron's bankruptcy in 2001 was the largest in U.S. corporate history at the time. The bankruptcy filing came after a series of revelations that the giant
energy trader had been using partnerships, called special–purpose entities (SPEs), to conceal

The Enron and Worldcom Scandals
The Enron and WorldCom scandals
Enron
#1. The segment that put Enron in difficulties was the LJM1. That SPE was the worst of all four SPE's. This one had no independant investor that
could put up the 3% that they needed for the controlling investor, where CHEWCO would work as a counterparty accounting to the U>S>
guidelines. Enron already owned 97% of CHEWCO, where if they had a controlling investor, the profits from CHEWCO would go directly to Enron's
assets. Later, they did not find a controller investor, and invented another SPE, which was LJM2. The problems in LJM1 still was there that affected
LJM2. Arthur Anderson, the auditor for Enron, went ahead and approved of this SPE, knowing that the financial statements had... Show more content
on Helpwriting.net ...
WorldCom
#1. In the general ledger of WorldCom, they were supposed to reduce the line cost expense accounts and reducing– in accounts corresponding to the
improper and false line cost expense in various reserve accounts. This would through off your balance sheet and your income statement, showing you
made profits, which indeed, you never did. Later, the senior management would instruct that the line cost expenses are fraudulently be reclassified. By
doing this, they had to adjust the schedules of certain Property, Plant and Equipment Capital expenditure accounts by increasing certain capital
accounts for "prepaid capacity". In the future periods, the increase of these certain accounts for "prepaid capacity" would then remain manipulation of
choice by Ebbers, which would add to their profits.
#3. WorldCom's board of directors should have reduced the conflicts of interest, so they could exercise the fundamentals of ethics to the shareholder's or
company and to the public's interest. They could have ensured that financial reported were accurate, complete, understandable, and transparent. The
directors should have also ensured that the accounting standards were adequate to protect the investor's interests.
#4. Lay may never been an accountant, but a milkman, but he was assisted in all of these manipulation by his Chief financial officer and his Controller
, which both men worked for Arthur

Essay on Overview of the Enron Scandal
Enron Corporation was an energy company founded in Omaha, Nebraska. The corporation chose Houston, Texas to home its headquarters and staffed
about 20,000 people. It was one of the largest natural gas and electricity providers in the United States, and even the world. In the 1990's, Enron was
widely considered a highly innovative, financially booming company, with shares trading at about $90 at their highest points. Little did the public
know, the success of the company was a gigantic lie, and possibly the largest example of white–collar crime in the history of business. The roots of the
lies start with former Enron CEO Kenneth Lay. This man helped bring together a number of smaller energy companies, namely InterNorth International
and ... Show more content on Helpwriting.net ...
All these factors lead to figures that were less than what Ken Lay promised, and even started posting losses by the second quarter of 1997. These
less than stellar numbers did not discourage company executives, and Enron continued to spend foolishly on advertisement and lobbying for
deregulation. All of the prior represents the business side of the downfall of Enron. That being said, businesses fail all of the time. The reason why
Enron Corporation and its executives will always live in infamy is not because the company failed, but how and why the company failed. How,
exactly, does a company worth about $70 million collapse in less than a month? It became clear that the company not only had financial problems, but
ethical problems that started from the top of the company and trickled down. A key player in these problems was Jeffrey Skilling. He was a man
brought to the company by Ken Lay himself. Skilling brought his own accounting concept to the company. It was called mark–to–market accounting.
This concept allowed Enron to record potential profits the day a deal was signed. This meant that the company could report whatever they "thought"
profits from the deal were going to be and count the number towards actual profits, even if no money actually came in. Mark–to–market accounting
granted Enron the power to report major profits to the public, even if they were little or even negative. It became a major way

The Enron Corporation Scandal
IDENTIFY THE ACCOUNTING PRACTICES THAT WERE ASSOCIATED WITH THE ACCOUNTING SCANDAL.
The Enron Corporation failures made world headlines for many reasons ranging from greed from its executives, the alleged malpractice and criminal
behaviours, and its quick and disastrous collapse. The most critical factor in Enron's melt down was the use of creative and manipulative accounting
practices to distort reported proп¬Ѓtability and indebtedness that befell the corporation (A. Holt and T. Eccles, 2002) The accounting practices
involved in this case are the revenue recognition criteria adopted by Enron Corporation, Market to Market strategies, the use of Special Purpose
Entities, booking to cost as assets and the corporate governance practices.
Revenue Recognition Mark–to–market and Merchant Model Revenue is the gross inflow of economic benefits (cash, receivables, other assets) arising
from the ordinary operating activities of an entity (such as sales of goods, sales of services, interest, royalties, and dividends). [IAS 18.7]. Revenue
recognition, as defined in the IASB Framework, means incorporating an item that meets the definition of revenue in the income statement when it is
probable that any future economic benefit associated with the item of revenue will flow to the entity, and the amount of revenue can be measured with
reliability.
Enron used revenues as its primary financial objective, performance driver and a measure of success. The employment of this hyper–inflated

The Main Reasons Behind The Enron Scandal
The ENRON Scandal is one of the most well–known financial and ethical crisis within American history. The main reason was the Agency problem as
we will illustrate with this paper.
The "agency problem" generally raises to the conflict of interest between organization and ownership in a corporate enterprise. Owners is primarily
focused on maximizing its capital through the business, while management is mainly interested in maximizing and stabilizing its salaries and benefits
without suffering or taking a serious risk to them, they always want to be in the safe side and not engage or be in real loss in their financial life.
1– Research the reason behind the Enron scandal?? – The fall of Enron was an obvious and predictable breakdown, that the main reasons for ... Show
more content on Helpwriting.net ...
This was clear about the management culture practices Obviously; the Enron disaster did not occur by chance. It was simplified by a corporate culture
that encouraged greediness and fraud. Enron's auditors (Arthur Anderson) showed absence of independence in their work. Enron's auditor, Arthur
Andersen, was found guilty in a United States District Court. Independence of auditors by separating the consultancy and auditing part is also vital for
the transparency aspects.
The estimation and reporting of the credit rating agencies was also very weak in the situation of Enron. it been subjected on the false information given
by the company. The agencies appear to be least involved deeply in Enron financial statement details. As is it known to every specialist in the financial
markets the responsibility of the credit rating agencies is to show a clear picture of the financial position of the company. Arthur Andersen was
unsuccessful to make truthful judgement, just because of the weakness in the skilled and ethical values, which led to its failure and exit from the field of

Enron Scandal
Introduction I have described the ethical and governance issues of the Enron scandal that took place in 2001. In this paper, there is information about
the way things went the way it did with the Enron scandal. They hide a lot of documents pertaining to how their profits increase so rapidly. It also
includes the close link Kenneth Lay had with George Bush. The investigators had some help with what happened in the scandal of Enron.
Enron scandal at a glance
Enron had grew from nowhere to becoming Americas seventh largest company in just 15 years, employing 21,000 staff in more than 40 countries.
They lied about their profits and were accused of a range of shady dealings, including concealing debts so they didn't show up in the ... Show more
content on Helpwriting.net ...
Bush. They gave U.S Attorney General John Ashcraft $57,499 in campaign cash for his failed 2000 Senate re–election bid in Missouri. Texas attorney
general John Comyn also accepted $158,000 in campaign contributions from the company.
Lessons from the Enron Debacle: Corporate Culture Matters! Enron's collapse has sent shockwaves all over the financial world raising serious
questions about corporate governance. Arthur Andersen turned a blind eye as the money disappeared. As long as there where a set of off the books,
unregulated private partnerships to take on debts, hide losses and kick off inflated revenues, the executives were able to keep bond rating agencies
happy. Andrew Fastow took the most blame because he was working on both sides of every transaction manipulating Enron financial statements to
enrich him and other service executives.
Creative Accounting used at Enron Creative accounting is a euphemism referring to accounting practices that may follow the letter of the rules of
standard accounting practices but certainly deviate from the spirit of those rules. Enron took the idea of extending the market–to–market accounting
over the short term of two or three years. By doing that their earnings were boosted and profits went up instead of going down in order for Enron to
show ongoing growth to the public. Creative accounting made from Enron look really powerful on paper, but like the say "looks can

Arthur Andersen And Enron Scandal Essay
1. Introduction
Arthur Andersen and Enron scandal might be the most recognized but not the only one, history have seen many similar accounting failures such as at
Satyam Computer Services and Lehman Brothers.
Will you invest in a company without unswerving financials? Accounting profession is considered candid and Investors rely on their work. Arguably,
an eighty nine year old firm did not take even eighty nine days to crumble down! The downfall of the Arthur Andersen and one of its clientele, Enron
contributed to radical changes for publicly held companies, accountants, managers, and many others. Employees lost their jobs, Investors lost their life
savings, homes, and confidence in the financial system. The impact was so significant that legislation was enacted through the Sarbanes–Oxley Act of
2002 to reinstate public confidence financial markets. ... Show more content on Helpwriting.net ...
A year before filing for bankruptcy, Lehman Brothers reported revenues of about $60 billion with earnings of over $4 billion. The stock price of
Lehman Brothers crashed to less than $4 from a high of $65.73 in January 2008 within months.
What is the history of such organizations and how did they collapse? There were a number of factors that contributed to the firm's failure. This paper
is an attempt to make an introspective analysis of select cases in retrospect to understand the pathology of failures and make a proper diagnosis for
prescribing remedies.
2. History
2.1 History: Enron and Arthur

The Ethics Of The Enron Scandal
More than a decade ago, one of the most commanding corporations in modern American history filed for bankruptcy. Enron, a seemingly invulnerable
company would eventually provoke sweeping changes in regulation that controls the management and accounting of public companies even to this
day. The Enron scandal has come to be known as one of the prime audit failures of all time and serves as a classic example of corporate greed and
corruption. However, for the generation that watched in horror as corporations such as Enron fell along with the stock market, this scandal is slowly
becoming just that: history. And for the newer generation of college students like me, it is almost ancient history. Despite the time that separates us
from this scandal, it has never been more important to remember the lessons learned and best understand how the adoption of The Clarkson Principles
can guide our careers in the business sector.
The story of Enron is truly remarkable. As a company it merely controlled the electricity, natural gas and communications sectors of the world. It
reported (key word, reported) revenues over one hundred billion US dollars and was presented America's Most Innovative Company by Fortune
magazine for six sequential years. But, with power comes greed and Enron from its inception employed people who set their eyes upon money,
prestige, power or a combination of the three. The gluttony took over sectors which the company could not operate proficiently nor successfully.

The Enron Scandal And Its Impact On The Business World
Ethics in the business world can often times become a second priority behind the gaining of profits and success as a company. This is the controversial
issue that led to the Enron scandal and ultimately the fall of this company. Enron Corporation was an energy company, and in the peaks of their
success, they were the top supplier of natural gas and electricity throughout America. Enron Corporation came about from a merger between Houston
Natural Gas and InterNorth. Houston Natural Gas was a gas providing company formed in Houston during the 1920's. InterNorth was a company
formed in Nebraska during the 1930's and owned one of America's largest pipeline networks. In 1985, Sam Segnar, the CEO of InterNorth bought out
Houston Natural Gas for $2.4 billion. A year later in 1986, Segnar retired and was replaced byKenneth Lay, who renamed the company and created
Enron. Enron was the owner of the second largest pipeline in America that measured over 36,000 miles. The company was also the creator of the
"Gas Bank", which was a new way to trade and market natural gas and served as an intermediary between buyers and sellers. As the company
continued to develop, it became more of a trader rather than a producer of gas. This trading extended into coal, steel, water and many other areas.
One of Enron's largest successes was their creation of a website called, "Enron Online" in 1999, which quickly became one of the top trading cites in
the world. By the year 2000 Enron as a company was

Impact Of Enron Financial Scandal
Introduction – Historic Enron Financial Scandal
In 1985 Houston Natural Gas and InterNorth merged to become Enron which started specializing in natural gas production. It moved from a $10
billion company in 1990 to a $101 billion in ten years. Kenneth Lay is the founder, Chairman and CEO who was challenged by the board of directors to
diversify the company portfolio, grow faster, increase investor's confidence, attract more investments and increase their credit rating. This is a great
vision that has to come through legitimate means and sustainable growth. Unfortunately Enron managements' greediness justified to themselves a lot of
unethical actions to achieve their self–interest. They took advantage of loop holes in deregulated markets, influenced ... Show more content on
Helpwriting.net ...
The first is the fact the Enron and its board of directors created a corporate culture that inspires innovation and creativity while totally ignored Ethics. It
was not in the board of directors nor the corporate management top priorities, so how it would be for those who report and commit day to day
transactions. The absence of a corporate culture that motivates transparency, integrity and carouge to report was a major cause of Enron's Scandal. For
example, Enron hired several accountants who understood the accounting loopholes. They helped the company to maximize on the loopholes in the
Generally Accepted Accounting Principles (GAAP). (Rapoport , Van Niel, & Dharan, 2009). The accountants did not write
–off the losses from the
special purposes entities but they only deferred the charges from them. This was also coupled by management focus on share prices, the second
intrinsic variable, that will impact their allowances and compensation packages. The focus on meeting or exceeding external analysts made Enron's
management manipulate financial statements and take advantage of any loops in the system that helps in claiming unrealized profits. The company
had to make more deals to illustrate the growth in its income. Jeffrey Skilling, the CEO, wanted to meet Wall Street projections and listed revenues
from projects that losing. (Unerman & O'Dwyer, 2004). Such aggressive and fruadunet accounting allowed Enron to falsely be in the wealthiest 50
companies of the Fortune 500 companies and dramatically increase Enron's revenues by over 700% (Benston & Hartgraves, 2002). Enron started using
the mark–to–market accounting method to recognize income from long–term projects which is not the intent of SEC approved accounting method.
Enron also introduced and recorded the present income from its estimated future value, although, the income is not guaranteed. (Benston & Hartgraves,

Taking a Look at the Enron Scandal
With the complex system where there were wide ranges of product which include physical assets, it had reached the limits of accounting. The company
had taken fully advantage of this to make balance sheet become a perfect picture of company's performance. They used mark–to–market method of
accounting, which state that "once a long–term contract was signed, the present value of the stream of future inflows under the contract was
recognized as revenues and the present value of the expected cost of fulfilling the contract were expensed". (Pauls, 2003) Therefore, the future profit
had been account even the real cash flow had not come to the company yet.
Moreover, cause when Enron come to the long term contract, they would assumed that there were long term declines in spot prices (Page 6, journal of
economics), there would be the risk of loss if there were the increase in the price of gas in the future and it does not recognize in the financial statement;
therefore, to make the income statement made more sense in economics term, Enron had created an accounting structure that help the company to
stable their income fluctuation. (ISDA, 2002)
In additional, Enron used special purpose entities to fund or manage risk as well as achieve financial reporting objective (page 11, Paul, 2003). For
example, when they wanted to remove a significant investment in their financial statement, they used one of its entities which were joint venture with
them to acquire it (Chewco case, ISDA, page

The Enron Scandal Of The United States
The Enron Scandal is still viewed today as one of the largest corporate bankruptcies in history. The greed that spilled throughout the organization started
with gradual disregard for basic accounting principles. Initiated by small discrepancies in the company financial system became extreme financial
crimes that left many without jobs and many investors penniless. The Enron scandal led to legislation that tightened restrictions on accounting practices
in the U.S. requiring more strict compliance with GAAP. Kenneth Lay founded Enron Corporation in 1985. This new energy company was the result of
a merger between the natural gas pipeline companies Houston Natural Gas and InterNorth. Throughout the 1990s the company was viewed as a ... Show
The internal practices continued in large measure because of improper auditing from accounting firm Arthur Andersen. David B. Duncan, the
leading audit partner to Enron, overturned many accounting concerns in the late 1990s such as fake transactions to hide debt and misrepresentation
of earnings on financial statements. Enron earned its profits by providing services like wholesale trading and overseeing energy facilities. They
adopted the 'merchant' model of accounting instead of the 'agent' model. Enron was not taking the risk of buying and selling contracts nor were
they earning the entire value of these contracts. Enron merely collected a brokerage fee for handling the transaction. However, by using the
'merchant' model over the 'agent' model, they were able to report the entire value of the contracts they were a part of as earnings. This led to grossly
overstated revenues on their balance sheet of over 600 million from 1997 to 2000. To keep up with this bubble of revenue, Enron had to continue to
mark up its earnings to outperform past results in order to move their stock price upwards. In 1990, Jeffery Skilling joined Enron and was involved in
management. He later became President and COO and by 1997 the only one above him was the founder, Kenneth Lay. Skilling insisted on the trading
business using 'Mark–to–Market' accounting for their long–term contracts instead

Enron Scandal Research Paper
The Enron Scandal was an enormous controversy in 2001. This scandal went on for years until finally the government caught up with what was going
on. In the Enron case, the company was stating that they were making profits from assets even though they were not making any money from it. They
would also transfer any information to an off–the–books corporation if they were not making as much as they thought that they should be making. All
this information would be unreported so that nobody would know that the company was losing money.
Enron then started using mark–to–market accounting so they could get investors to sign a long–term contract with them. They would have them sign a
contract with them and then lie to their investors about how much money they were making and how the company was doing. When the investors
would sign the contracts then Enron would use special purpose ... Show more content on Helpwriting.net ...
After the explosion an investigation was conducted to see what the cause of the explosion was. The investigators found that not only was Massey
Energy at fault but so was the U.S. Department of Labor and its Mine Safety and Health Administration were at fault for failing to act decisively at
the mine even after Massey was issued 515 citations for safety violations at the Upper Big Branch mine in 2009. Don Blankenship, CEO of Massey
Energy was aware of these violations but was still having workers work in these minds. It was also reported that some employees were being
threatened with dismissal if they did not go into the mines. This is a problem that seemed to slip through the cracks, if the U.S. Department of Labor
and Mine Safety and Health Administration would have continued to fine Massey Energy for their continued incompliance with the laws and
eventually shut them down until the violations were fixed then this catastrophe could have been

Enron Accounting Scandal
Enron was originally a pipeline company in Houston, Texas in 1985. Enron became a company that was able to profit by providing deliveries of gas
to utility companies and businesses. As the deregulation of electric power rose, Enron diversified the business and entered into an energy broker, which
traded electricity and other types of commodities.
Enron employed several highly qualified PHDs in mathematics, physics, and economics. Enron continued to enter into contracts with customers and
utilized a group of skilled employees to interpret, manage, and confine the high risks Enron was taking. Enron's attempt to create a collection of
partners that would permit employees to shift debt and losses off of the books would soon come to an ... Show more content on Helpwriting.net ...
The greatest disadvantage of the mark–to–market system is that once already in use by a company it is very hard for the company to change its
direction of systems.
Enron had many SPE's that it used to help defraud the company. Emerging Issues Task Force (EITF) created in the 1990's help Enron maintain and
conceal the SPE's. EITF only required 3 percent of capital/assets to be contributed by independent external sources in order for a SPE to exist. Albrecht,
a PhD in the AICPA (American Institution of Certified Public Accountants), states in his report:
EITF 90–15" (The 3% rule) Allowed corporations such as Enron to "not consolidate" if outsiders contributed even 3% of the capital (the other 97%
could come from the company.) 90–15 was a license to create imaginary profits and hide genuine losses. FAS 57 require disclosure of these types of
relationships (FAS 57 was proposed and implemented after the Enron scandal).
Enron had a $597 million dollar cash flow in the first half of year 2000 by taking loans out from banks such as Citigroup and Morgan– Chase totaling
nearly 3.4 billion. Just in interests alone, Enron was collected 2 million dollars each day.
The damage incurred in the monetary form, was seen through the stockholders, employees, and other companies involved. Employee pension plans
could not be paid, investors watched the stocks fall to $0.09 cents per

Effects Of Arthur Andersen And Enron Scandal
. Introduction
Arthur Andersen and Enron scandal might be the most recognized but not the only one, history have seen many similar accounting failures such as at
Satyam Computer Services and Lehman Brothers.
Will you invest in a company without unswerving financials? Accounting profession is considered candid and Investors rely on their work. Arguably,
an eighty nine year old firm did not take even eighty nine days to crumble down! The downfall of the Arthur Andersen and one of its clientele, Enron
contributed to radical changes for publicly held companies, accountants, managers, and many others. Employees lost their jobs, Investors lost their life
savings, homes, and confidence in the financial system. The impact was so significant that legislation was enacted through the Sarbanes–Oxley Act of
2002 to reinstate public confidence financial markets. ... Show more content on Helpwriting.net ...
A year before filing for bankruptcy, Lehman Brothers reported revenues of about $60 billion with earnings of over $4 billion. The stock price of
Lehman Brothers crashed to less than $4 from a high of $65.73 in January 2008 within months.
What is the history of such organizations and how did they collapse? There were a number of factors that contributed to the firm's failure. This paper
is an attempt to make an introspective analysis of select cases in retrospect to understand the pathology of failures and make a proper diagnosis for
prescribing remedies.
2. History
2.1 History: Enron and Arthur

Enron Scandal Essay
The Enron Scandal
In a front–page article with no less than four by–lines (7/03, "Enron Triggers a Slew of Proposed Fixes But What Will Stick?" by Steve Liesman et
al.), The Wall Street Journal reports, "As more than 10 congressional committees pursue inquiries, 32 Enron–related bills have been introduced to
address ills ranging from auditor conflicts of interest to the scams of an unregulated derivatives market. The Securities and Exchange Commission
pledges to reform accounting rules, get tough on fraud and overhaul auditor oversight. General Electric Co. says it will issue a disclosure statement the
size of a phone book, if that's what investors want." The trouble is that such a phone book, if it reflected the state economic ... Show more content on
Helpwriting.net ...
The "level playing field" catch–word distracts attention from the monstrous discrepancy between the accountancy practised by the government in its
own books and what the large corporations get away with. The corporations hide their debts by keeping them "off–balance–sheet." The government
buries its investments. The level playing field is the Mother Lie that has birthed the swarm of distortions and untruths that are now crawling out from
under every table and from every crack in the walls.
It is gratifying that the media and some of our politicians are starting to recognize some of what ER had warned about for many years. But the most
basic lie is still protected by the greatest of taboos. It goes on being drummed into freshmen's heads in every country of the world. No Finance Minister
can open his mouth without it jumping out at you. The mirage of a self–balancing economy made up of tiny actors that are all powerless individually
to affect prices is the "scientific" version of the "level playing field."
That could hardly cover an economy dominated by the Microsofts, General Electric, and the Enrons. Surely you have to deal with that obvious clash
between the fine theory and the reality to which it is being applied. You might as well send

The definition of ethics is living one 's life according to right or wrong behavior both towards others and themselves (Ghillyer, 2014). How a
person derived to their beliefs of right or wrong is a direct reflection of several factors such as; family upbringing, and religious dynamics. Each of
these characteristics plays a major role in the direct choices a person will make in their day to day lives. While some people can stand by their
personal beliefs regardless of the situation, there are some who are heavily influenced by others.
However, in the business world, the influence of power and money has cost people their livelihoods as well as compromised their self–dignity on
many levels. One highly publicized scandal that many have known and read about is the Enron Scandal. The motive behind what a person will do
remains endless as it is seen in this unfortunate tale of lies and greed in one corporation. The part that many question even to this day is when the
story unfolded it was announced that several people in high positions were all aware of the unethical practices being done but, all decided to turn a
blind eye. In the next few paragraphs, we will look at the events that led up to the fall of a company that was at the height of its growth and how all of
that would change within minutes.
Undoubtedly the Enron scandal will be one incident that will be spoken of amongst big corporations and financial institutes for a long time. Many have
asked the question, who was

Essay On Enron Scandal
The reason of Enron Corporation downfall for audit failure is conflict of interest and accounting fraud. This is because it has been suggested that
conflicts of interest and a lack of independent oversight of management by Enron's board contributed to the firm's collapse. Some have suggested that
Enron's compensation policies engendered a short–sighted focus on earnings growth and stock price. In addition, recent regulatory changes have
focused on enhancing the accounting and strengthening internal accounting and control systems. In these issues, it begin with Enron's board. The
conflict of interest between the two roles played by Arthur Andersen, as an auditor, he also as a consultant to Enron Corporation. While investigations
continue, Enron Corporation has sought to salvage its business by spinning off various assets. As that, Arthur Andersen actually has admitted some...
Show more content on Helpwriting.net ...
It also help to understand the real meaning of Shareholder Wealth Maximization. Enron Corporation scandal also help to conceal the true of financial
statement and ensure that investor fund. When the time of Enron's collapse, it was the biggest corporate bankruptcy ever to hit the financial world. But
then WorldCom, Lehman Brothers and Washington Mutual have surpassed Enron as the largest corporate bankruptcies. TheEnron scandal drew
attention to accounting and corporate fraud, as its shareholders lost $74 billion in the four years leading up to its bankruptcy, and its employees lost
billions in pension benefits. The Sarbanes–Oxley Act has been called a "mirror image of Enron, the company's perceived corporate governance failings
are matched virtually point for point in the principal provisions of the Act." Increased regulation and oversight have been enacted to help prevent or
eliminate corporate scandals of Enron's

Scandal Of Enron Scandal
Enron was a Houston Based natural gas Pipeline Company formed by merger in 1985.The corporation Enron was effectively involved in energy
broker, electronic energy training, global commodity and options trading. Enron was long viewed as star of the stock market. Enron was America's
seventh largest corporation. Enron was steady company with good revenue, a large part of Enron case was made up of paper.
Enron employed approximately 20,000 staffed workers in an organization and was one of the major electrical, natural gas, communicators and pulp and
paper companies, with claimed revenues of $111billion during 2000.
From 1990's until fall 2001 Enron was known as one of the best America's energy, commodities and services company. Enron was the largest... Show
Special purpose was created to mark more of the significant liabilities from Enron's financial statements. These transactions seem more profitable than
it actually was a danger. The corporate officers were creating more and more money of billions and dollars in profit while the company was actually
losing money. The executives and insiders at Enron knew about the increased the accounts that were hidden loss for the company but the investors
knew nothing of it.
The fate of Enron shook the entire US economy and its global perception of a well monitored and ethical economy. The scandal made the authorities
realize the importance of internal control in business enterprises. It also helped understand the real meaning of share holder's wealth maximization and
the boundaries within which this key objective is to be achieved.
Initially, skilling and other CEO's responded to questions by insulting reporters and lying to employees when pressure mounted executives sold his
Enron shares at massive profit and resigned the company declared bankruptcy its formerly golden stock now worthless because of its silent complicity
in the Enron scandal the company was also offered to close its

Business Ethics : Enron Scandal
Business ethics have been the central concern of all corporations in operating business. Enron scandal was the highlighted case representing the
dramatic violation of business ethics with the involvement of misusing power to conduct unethical missteps to gain self–interest, resulting in a collapse
of the whole organization. This report is aimed at assessing Enron case to provide better understanding of its rise and fall through the background of the
company's formation and bankruptcy as well as applying few of ethical approaches to seek some possible alternative outcomes such as utilitarian,
expectation and choice.
II.Body
a.Background:
Enron was found in 1985 as the result of between Houston Natural Gas and Inter North Pipeline ... Show more content on Helpwriting.net ...
Moreover, Enron used invasive approach to archive $27 billion in one quarter as biggest energy wholesaler and boosted Enron share value up to $90
in 2000 that attracted attentions of investors to purchase more. However, misleading information and other financial practices on online system caused
several collapse in 2001 that led Enron share value felt down under $1 and bankrupt after that (The New York Times, 2001).
b.Utility test
Although Enron has their own code of ethics, which listed out their policies highly focusing on honesty, respectfulness, and generation of the benefit
for stakeholders as a whole, Enron management actions were only complied with a certain level of ethics philosophy that led to poor approaches to
handle behavioral and moral circumstances (Paine 1994; Petrick and Quinn 2000). According to utilitarian theories with solely concentrating on "social
consequences" – generating the best outcomes for affected people as a whole, Enron's executive actions were recognized as being unethical because
they failed to yield the greatest benefit of all other stakeholders while playing the critical role of a linkage between employees, shareholders, suppliers
and customers (Petrick and Scherer, 2003). Particularly, their top management focused on their own interests that derived from other's expenses by
feeding hunger with greediness, bribing government under political donation and making series of unethical actions that caused the uncured

The Enron Scandal Of Enron Essay
One popular event that took place in our economy was the Enron Scandal, which happened in late 2000 and lasted into the following year. Those
who were involved in this incident directly such as CEO's Ken Lay and Jeff Skilling thought what they were doing was not wrong and that they were
able to get away with making millions falsely (Seabury, 2008). However, this was a serious crisis situation and many people were affected through the
process as well as their money. Enron was valuing themselves at a higher price than what they truly were worth, and nothing was matching up ("The
Fall of Enron"). Enron was able to make it appear that they were having many new business ventures with imaginary companies or companies where it
just did not work out for them, adding value to their company, and hiding all of their mistakes (Keller, 2002). Not only this, but their main goal was
getting into the energy business and having it become de–regulated which subsequently had the state of California suffering an energy crisis due to
their greediness (Seabury, 2008). Overall, the underlying causation of their downfall and crisis was their greed. These people behind the Enron name
were money hungry and as long as the pay checks were coming to them, they did not care about the employees who would be losing their jobs, the
people who had to endure the power outages in California, nor the people who's money they manipulated and eventually lost. Enron was also favored
by the government since they had

The Context Of The Enron Scandal
Introduction
The main aim of this essay is to analyze business ethics in the context of the Enron scandal. Enron scandal became notorious for violating ethical
standards. The Enron scandal is one that left a deep and ugly scar on the face of modern business. As a result of the scandal, thousands of people lost
their jobs, some people lost their entire pensions, and all of the shareholders lost the money that they had invested in the corporation after it went
bankrupt. These corporations faced a great dilemma with the federals and state for manipulating financial statements. Corporations alone cannot be
blamed on this, as accounting firms were involved in this as much as the corporations were. Even though Enron went bankrupt and disappeared ... Show
Kenneth lay the CEO of Enron stated in an interview that all these figures were above his head just made him wanted more. In the end, those
misplaced morals killed the company while it injured all of those who had gone along for the ride. Enron scandal has both illegal and unethical
activities, causing the less of money jobs and investment for thousands of people. The violation came about when everything got out of control and
Mr. Lay could no longer cover his debts. This later laid to the biggest bankruptcy filed by any corporation with over $62 billion in assets. Other
violations are bank fraud, money laundering, insider trade, and conspiracy. The final blow was dealt when Dynegy (NYSE: DYN), a company that
had previously announced would merge with the Enron, backed out of its offer on Nov. 28. By Dec. 2, 2001, Enron had filed for bankruptcy. In
addition to the conflict of responsibilities, the violation of independence also existed because there were close relationships and interest conflicts
between AA's employees and Enron's

Ethical Scrapbook In the three excerpts that will be discussed in this report there is a theme. That theme is ethics or the lack there of. What all three
of these cases have in common is that people were willing to trade in their reputations, their livelihood and in some cases their personal freedom to get
what they wanted. In two of the examples, the prize they sought was money, pure and simply a case of greed. Importantly, these people already had
significant wealth, and they were willing to take the chance on losing what they had already attained to get more. In the other case, the defendant's
ethics are what initiated his behavior.
Enron
The first story is without a doubt one of the most serious cases of its kind. The Enron ... Show more content on Helpwriting.net ...
The investigation revealed a network of partnerships designed to hide Enron's debt. Unfortunately, by November 2001 the company's stock had gone
from a high of $90. to $1. investors had lost billions of dollars (Silverstein, 2013). The company filed for bankruptcy protection in December 2001 and
around 5,600 employees lost their jobs.
The U.S. Justice Department began an investigation and by January of 2004 Fastow accepted a deal to plead guilty to one count of conspiracy to
commit wire fraud and conspiracy to commit securities fraud in exchange for his cooperation with the Justice Department (Silverstein, 2013). In
February 2004, Jeffrey Skilling pled not guilty to charges of wire fraud, securities fraud, conspiracy, insider trading and making false statements on
financial reports (Silverstein, 2013). In addition, Kenneth Lay was charged with fraud and making misleading statements, he pled not guilty. The trial
began in January 2006, in the end Mr. Lay and Mr. Skilling were found guilty of lying to investors, employees and regulators in an effort to conceal the
loses of the company (Silverstein, 2013). Eventually, Mr. Skilling was sentenced to twenty–four years in prison however, in July 2013 his sentence was
reduced by ten years. Although, Mr. Lay was also found guilty, he died July 5, 2006 at his home in Aspen Co. before being sentenced. This scandal
epitomized the excesses of the 1990's and the management failures of

The Enron Scandal Of Enron
Public accounting firms have long played a role in convincing the public the authenticity of the corporates' financial statements. However, the public
started to become skeptical about accountants' reliability when the Enron scandal occurred. In October 2001, SEC started an investigation against
Enron for improper accounting practice. According Sherron S. Watkins, the former vice president for corporate development,Enron failed to disclose
complicated deals with its partnerships to inflate the stock price. In a report by Enron's law firm, Arthur Andersen, the accounting firm that was in
charge of auditing Enron, was involved and failed to report the partnership transactions, which resulted in the collapse of Enron.
Many believed ... Show more content on Helpwriting.net ...
It is no doubt that Arthur Andersen (AA, hereinafter), Enron's auditing firm, have violated many laws and rules prior to and during the investigation.
Thus, our group does not believe there is anything that could argue for them from an ethical point of view. From the case that we read, it is clear to
everyone that AA's senior level management knew most of the intentional misstatement in Enron's financials, yet they still issued an audit report that
does not include any of the information. Furthermore, when SEC initiated the investigation over Enron, instead of cooperating with the SEC and turn
in the evidence of fraud, AA's Enron auditors shredded thousands of pages of evidence, made the entire process much harder for SEC. Both actions are
alterations of the general public's interests, and thus, are unethical.
There are several things that could have helped to prevent the auditing fraud in the accounting profession, and many of which have already been in
effect following the Sarbanes–Oxley Act. Most of these actions are to increase the standard of independence in an auditing process. The main reason
why Arthur Andersen was not disclosing material misstatement in Enron's financial reports is due to conflict of interests. As we know today, auditing
firms are not to be providing consulting services to remain independent. However, back in the days prior to the fall of

Enron And The Enron Scandal
Enron, The Shadiest Guys In the Room When you ask young people about the Enron scandal today, most of them have not even heard of it. The fact
of the matter is, it is very relevant to young professionals today. Enron is the most recent story of classic Wall Street greed and fraud. However it is
still argued today by different stakeholders who are is responsible. This essay will take the viewpoint from multiple stakeholders to use the Enron
Scandal as an example to further explain American corporate corruption. To analyze this scandal, we first need to know what happened. Enron opened
as a natural gas company in Houston, Texas in 1985, founded by Ken Lay. It then formed into energy, commodities, and service company. Lay then
hired Jeff Skilling as CEO; it was these two and a few other high–ranking executives that led to the failure of Enron. In short, Enron was losing money,
but with the work of fancy accounting and taking advantage of free enterprise, reported huge false profits. This all came to a head in 2001 when Enron
declared bankruptcy.
From the employees perspective. When looking at the employees' point of view on the scandal, we first start with the executives. Ken Lay, chairman
of Enron, Jeff Skilling, CEO, and Andy Fastow, CFO, were the masterminds behind the huge profits. Skilling was in charge of somewhat changing the
face of Enron. He took the company from being solely a power company, to a commodity trading company. To quote Alternet, "They tried to trade

Enron Corporation : The Enron Scandal Essay
The Enron Scandal
The objective of an audit is to "obtain reasonable assurance" of the credibility of the financial statements of a company . However, in some cases
auditors can fail to recognize – or intentionally ignore – misleading data within a company's financial statements, leading to negative outcomes for
lenders and investors. This report will discuss the Enron scandal in which the auditing firm Arthur Andersen LLP turned a blind eye to the fraudulent
actions of Enron Corporation, leading to the downfall of both companies and great harm to thousands of stakeholders.
Enron Corporation Background
Enron Corporation was an American energy company formed by Kenneth Lay in 1985 in Texas. Enron was hugely popular with investors throughout
the 1990's rising to become the "seventh–largest company in America" with a stock price of $83.13 (over 70 times earnings) by December 31st 2000 .
However, less than a year later, on December 2nd 2001, Enron filed for bankruptcy and the stock price plummeted to a mere $0.67 . This resulted in
investigations into the company's use of misleading, fraudulent, "aggressive accounting" techniques that understated debts and overstated earnings .
The Scandal
Timeline of Events
In 1990 Kenneth Lay hired McKinsey & Co consultant Jeff Skilling to improve Enron's finances. Skilling joined the company on the condition that
they adopt mark–to–market accounting for their long term contracts .
As a result of this implementation, alongside other

Enron Scandal
CILM Book Review
0834172
IB3A20 Critical Issues in Law and Management
Book Review
Enron, Titanic and The Perfect Storm – Nancy B. Rapoport
Student No: 0834172 Word Count: 1500
1
CILM Book Review
0834172
Two years after Enron filed for bankruptcy in 2001, Nancy b. Rapoport wrote this essay expressing her unique perspective on the real cause of Enron's
demise. This essay catches the reader's attention instantly, because unlike abundant other articles written on the biggest corporate scandal in American
history, the author here rejects Jeff Skilling's (former president of Enron) argument1 of what brought about Enron's downfall. She instead uses another
metaphor, arguing that Enron's downfall was more like Titanic's– ... Show more content on Helpwriting.net ...
I would go a step further to say that it seems like the author has taken the metaphors a bit too seriously and would agree with Mark's comment in
'Lawyers in the Perfect Storm3' that ''her insistence on comparison of the Enron scandal to the tragicomedy of human errors in the sinking of the Titanic
underestimates the importance of the systemic failures that allowed the malign leadership of Enron to produce such an enormous disaster.''
Nevertheless, she develops her further argument well as she explores the inextricable link between Character and Leadership. She elaborates on the
inevitable failure of character in Enron leaders to resist illegal deals when the supervisors of those leaders were also engaging in side deals (pg 209).
Her close attention to the underlying conflict of human traits and situations, aggravated by the magnitude of profits offered by the Enron culture

justifies her statement, 'why it must have taken significant strength of character to resist getting on that gravy train' (pg 210).
3
Sergeant, M, .2003. Lawyers in the Perfect Storm, Washburn Law Journal,. pg 3
4
CILM Book Review
0834172
Moreover, the author does not merely conclude her argument, rather deals well with counter evidence as she considers the few people that did resist
and play the role of whistle blowers. Her point that 'most whistle blowers at Enron were suppressed with downright abuse

Enron Scandal Of Enron Corporation Essay
Introduction
Enron scandal which aroused in 2001 was one of the most famous events in the area of fraud audit. As the auditor company of Enron, Arthur Andersen
failed to prepare true and fair auditing reports. They both suffered lethal loss at that time. The following paragraphs will discuss this fraud event,
including the organization history, the organization's event, the fraud issue in the event, the consequence of the main stakeholders, auditors in the
event and their roles, and the current situation of people who are responsible.
The organization, the time and place
Enron Corporation was an energy company which founded in 1930 in the United States. At that time, the predecessor of Enron was named as Northern
Natural Gas Company which was mainly based in Houston, Texas. In 1985, the Northern Natural Gas Company purchased one of its competitors,
Houston Natural Gas Corporation, and renamed as Enron Corporation. During Enron's operating years, over 30 different types of products are provided
around 40 countries in the world, such as power, petrochemicals plastics, steel and pulp and paper. Before the bankruptcy of Enron, it had
approximately 20,000 staff around the world and it was the seventh largest American company and one of the largest integrated communication, natural
gas, pulp and electricity companies in the world (Referenceforbusiness, 2016).
What happened – an overview of the events in general
However, a series of intentional accounting frauds lead Enron

Enron Scandal Essay
The reason of Enron Corporation downfall for audit failure is conflict of interest and accounting fraud. This is because it has been suggested that
conflicts of interest and a lack of independent oversight of management by Enron's board contributed to the firm's collapse. Some have suggested that
Enron's compensation policies engendered a short–sighted focus on earnings growth and stock price. In addition, recent regulatory changes have
focused on enhancing the accounting and strengthening internal accounting and control systems. In these issues, it begin with Enron's board. The
conflict of interest between the two roles played by Arthur Andersen, as an auditor, he also as a consultant to Enron Corporation. While investigations
continue, Enron Corporation has sought to salvage its business by spinning off various assets. As that, Arthur Andersen actually has admitted some...
Show more content on Helpwriting.net ...
It also help to understand the real meaning of Shareholder Wealth Maximization. Enron Corporation scandal also help to conceal the true of financial
statement and ensure that investor fund. When the time of Enron's collapse, it was the biggest corporate bankruptcy ever to hit the financial world. But
then WorldCom, Lehman Brothers and Washington Mutual have surpassed Enron as the largest corporate bankruptcies. TheEnron scandal drew
attention to accounting and corporate fraud, as its shareholders lost $74 billion in the four years leading up to its bankruptcy, and its employees lost
billions in pension benefits. The Sarbanes–Oxley Act has been called a "mirror image of Enron, the company's perceived corporate governance failings
are matched virtually point for point in the principal provisions of the Act." Increased regulation and oversight have been enacted to help prevent or
eliminate corporate scandals of Enron's

Enron was a corporation located in Houston, Texas and in just fifteen years the US energy trading and utilities company grew to become one of
America's largest and more successful cooperation's. Enron suffered a major fall. After being one of the most successful corporations Enron became
the biggest company to file bankruptcy in history. In this research paper it will discuss about the history of Enron, the fraud committed and who is to
blame. The historical development of white collar crime in the Enron Corporation was committed for financial gain. The Enron scandal is an example
of a continuing trend of falsifying data in the history of white collar crime.
Falsifying data has been a problem that has been happening for a long ... Show more content on Helpwriting.net ...
Enron became the largest seller of natural gas in America. In August 2000 Enron stocks reach almost $91 a share. As reported by Li, its annual
revenues rose from about $9 billion in 1995 to over $100 billion in 2000 (2010, p.37). It has been more than a decade ago since the Enron scandal
in Houston, TX. Enron was also known for one of the largest fraud scandals in American history. After so many years of power and successful deals
and contracts, the company suffered a collapse and the company suffered rapidly. Both Lay and Skilling were headquartered in and also head in the
entire fraud, scam and scandal of the Enron Corporation was best known for.
Even though records show executives of the company made hundreds of millions of dollars and was going in the right track the successful
corporation collapsed, and cost investors as much as seventy billion dollars its shares trading for about $90 each. Furthermore, Lay was convincing his
employees to hold on to their stocks and purchase even more. Meanwhile, executives were selling their stocks. Enron executives learned that they faced
a major problem for hiding and allowing inflating, the offshore and loose of the company to happen.
Enron executives also attempted to hide the debt with the help of the US Security and Exchange Commission but were unsuccessful. Enron's investors
had no idea of the fraudulent activities occurring in their

Enron : Year Of Scandal Essay
Cost Accounting Project Paper
Enron – year of scandal 2001 – Arthur Andersen
Introduction
As per various researches, it has been proved that today variety of issues are prevailing in our society and all of them should be properly catered so
that no further issues can be raised and this will, in the end, helps in reshaping the entire structure of our society too. Therefore proper measures should
be taken from the very start so that no negativity can be raised and this will eventually help in enhancing the efficiency of our society too. The ethical
code of conduct is linked directly with the research ethics and this is the major arena that should be highlighted positively in our society in order to
enhance potential outcomes. In an organization, it is important to see how work is done by keeping in mind the ethical code of conduct and how it
is affecting the society. In the majority of the fields, information security is not directly linked with the security and ethics and this is the reason how
it is leading towards various alarming issues too. Therefore it is important to see how to enhance the effectiveness of various products. This paper
will focus on ethics and how Eron faced issues due to lack of ethical strategies (Conroy & Emerson 2006).
Therefore it is important to note that there is a positive strategy that is linked with ethics and this is the only possible method with the help of which
variety of other negative issues can be resolved and by this organizations will

In every single accounting or ethics class, the "Enron Scandal" as a lot might say is brought up to teach all the students a lesson about ethics and how
regulations in the accounting world were enacted. The "Enron Scandal" dealt with two parties, first Enron itself, and then their auditors Arthur Andersen.
Enron used to be one of the most innovative companies in the world, and Arthur Andersen was the biggest professional services company in the world,
so when they both fell after the so called "scandal" it completely changed the world of Accounting. The road to multi–million dollar companies failing
is a big one so how exactly did it happen. It all had to do with the way Enron and Arthur Andersen were run and changed which ended up in the demise
of both companies.
The Enron Corporation started in 1985 when Houston Natural Gas merged with InterNorth, a Nebraska based Company. Enron was known as the
'Americas Most Innovative company' for 6 consecutive years."(Folger). The reason Enron was so innovative is because it completely changed the way
the energy industry was run. Kenneth Lay, Enron's CEO hired consultant Jeffrey Skilling to completely change the business strategy that the company
was run on. They started taking advantage of the fact that energy industry because deregulated and "created a 'gas bank' in which Enron would buy gas
from a network of suppliers and sell it to a network of consumers, contractually guaranteeing both the supply and the price, charging fees for

The Ethics Of Enron Scandal

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