this slide is for enron scandal.enron scandal details.famous audit scam in United States(US).for students/Professionals who are looking for a presentation on the topic Enron scandal
Enron Scandal " A Fundamental Case Study" Emran Hosain
Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. It was founded in 1985 as a merger between Houston Natural Gas and InterNorth. Enron employed approximately 30,000 staff and was a major electricity, natural gas, communications and pulp and paper company, with claimed revenues of nearly $101 billion during 2000.
Fortune named Enron "America's Most Innovative Company" for six consecutive years.
At the end of 2001, it was revealed that its reported financial condition was sustained substantially by institutionalized, systematic, and creatively planned accounting fraud, known as the "Enron scandal".
this slide is for enron scandal.enron scandal details.famous audit scam in United States(US).for students/Professionals who are looking for a presentation on the topic Enron scandal
Enron Scandal " A Fundamental Case Study" Emran Hosain
Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. It was founded in 1985 as a merger between Houston Natural Gas and InterNorth. Enron employed approximately 30,000 staff and was a major electricity, natural gas, communications and pulp and paper company, with claimed revenues of nearly $101 billion during 2000.
Fortune named Enron "America's Most Innovative Company" for six consecutive years.
At the end of 2001, it was revealed that its reported financial condition was sustained substantially by institutionalized, systematic, and creatively planned accounting fraud, known as the "Enron scandal".
Presentation on Enron Corporation Scandal.
The Presentation consists of Introduction, Rise, Fall, Impact, Methods of Accounting, Auditing Errors, Conviction, Changes after the Enron Scandal.
World's biggest financial scam. This presentation would give you all the information about the people who are engaged in the scam and they manipulated their data from balance sheet. How culprits were sent behind bars and what were the changes in Law that were done after this scam. For more understanding of case i will recommend to see the movie
" Enron- The smartest guy in the room"(2005)
Business Ethics case study on spectacular rise and fall of Enron. Enron Corporation was an American energy, commodities, and services company based in Houston, Texas.
The Enron scandal (Accounting Fraud), publicized in October 2001, eventually led to the bankruptcy of the Enron Corporation
Presentation on Enron Corporation Scandal.
The Presentation consists of Introduction, Rise, Fall, Impact, Methods of Accounting, Auditing Errors, Conviction, Changes after the Enron Scandal.
World's biggest financial scam. This presentation would give you all the information about the people who are engaged in the scam and they manipulated their data from balance sheet. How culprits were sent behind bars and what were the changes in Law that were done after this scam. For more understanding of case i will recommend to see the movie
" Enron- The smartest guy in the room"(2005)
Business Ethics case study on spectacular rise and fall of Enron. Enron Corporation was an American energy, commodities, and services company based in Houston, Texas.
The Enron scandal (Accounting Fraud), publicized in October 2001, eventually led to the bankruptcy of the Enron Corporation
TUNNELING V/s AGENCY EFFECT: A CASE STUDY OF ENRON & SATYAMpptxYashleenkaur10
An agency problem involves the functioning of a typical Principal- Agent relationship. The problem here is ensuring that the agent acts in the principal’s interest, rather than his own. The agency problem occurs due to the fact that the agent has better knowledge of the facts of a given transaction as opposed to the principal and thus the principal has no assurance that the agent’s actions were indeed in his best interest.
There are 3 basic types of agency problems
1. The first problem is a conflict between the owners of a firm and the hired managers.
2. The second type of problem is the conflict between the controlling owners of a firm who hold majority and the non- controlling, minority shareholders.3. The third type of agency problem is the conflict between owners of the firm and third transacting parties such as creditors, customers and other employees.
Enron is known as the one of the largest fraud scandals in the United States history.
Enron corporation was an American energy, commodities, and services company based in Houston , Texas.
Enron formed in 1985 by Kenneth Lay.
During 1985, it bought the smaller and less diversified Houston natural gas company.
The company initially named itself “HNG/inter North Inc., however was later renamed to “Enron”.
Satyam Company Services Ltd. was incorporated on June 24, 1987
Promoters holding of the shares in 1992 was 18.78%
Main business of the company was IT related fields and it came into prominence after Y2K problem
In 1991, it was in a rented house having 10 Engineers.
Company was listed in Bombay Stock Exchange in 1992
company bags its first fortune 500 client John Deere & Co
Revenue crossed $2 Billion -2008
Listing in NASDAQ, USA- 1999
Listed on New York Stock Exchange- 2001
The Collapse Of Enron And The Sarbanes-Oxley Act
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CASE 3.2 Ethics, Schmethics-Enrons Code of EthicsIn Jul.docxannandleola
CASE 3.2 "Ethics, Schmethics"-Enron's Code of Ethics
In July 2000, Enron Corporation published an internal code of ethics docu-
ment that ran 64 pages in length (see the Appendix 1).Page 12 of the document
proudly announced the company's position on business ethics:
Employees of Enron Corp., its subsidiaries, and its affiliated companies
(collectively the "Company") are charged with conducting their business
affairs in accordance with the highest ethical standards. An employee
shall not conduct himself or herself in a manner which directly or indi-
rectly would be detrimental to the best interests of the Company or in
a manner which would bring to the employee financial gain separately
derived as a direct consequence of his or her employment with the Com-
pany. Moral as well as legal obligations will be fulfilled openly, promptly,
and in a manner which will reflect pride on the Company's name.
Products and services of the Company will be of the highest quality and
as represented. Advertising and promotion will be truthful, not exagger-
ated or misleading.
Agreements, whether contractual or verbal, will be honored. No bribes,
bonuses, kickbacks, lavish entertainment, or gifts will be given or received
. in exchange for special position, price or privilege . . . Relations with
the Company's many publics-customers, stockholders, governments,
employees, suppliers, press, and bankers-will be conducted in honesty,
candor, and fairness." .- ~ ~ ~ -
Subsequent investigations into the inner workings of Enron Corp. revealed that
the only time this code of ethics received formal attention (other than, presum-
ably,when it was created and formally accepted) was when the board of directors
voted to waive key provisions of the code in order to allow the off-balance-sheet
partnerships that Chief Financial Officer Andy Fastow ultimately used to hide
over half a billion dollars of debt from analysts and investors.
A more realistic picture of the apparent flexibility of Enron's ethical culture
can be found in the extreme conflict of interest represented in its relationship
with Arthur Andersen. Andersen provided both consulting and auditing ser-
vices for fees running into millions of dollars-money that became so critical to
Andersen's continued growth that its employees were encouraged to sign off on
off-balance-sheet transactions-transactions that were not shown on Enron's
publicly-reported balance sheet-that stretched the limits of generally accepted
accounting principles (GAAP) to their furthest edges. In addition, Enron hired
former Andersen employees to manage the affairs of their former colleagues,
which further strengthened the conflict of interest in a relationship that was
supposed, at the very least, to be at arm's length, and, at best, above reproach.
1. What is the purpose of a code of ethics?
2. Do you think the employees of Enron Corp. were told about the vote to put
aside key elements of the code of ethics? If not, why not? If they had .
When listening about building new Ventures, Marketplaces ideas are something very frequent. On this session we will discuss reasons why you should stay away from it :P , by sharing real stories and misconceptions around them. If you still insist to go for it however, you will at least get an idea of the important and critical strategies to optimize for success like Product, Business Development & Marketing, Operations :)
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Michael Economou is an Entrepreneur, with Business & Technology foundations and a passion for Innovation. He is working with his team to launch a new venture – Exyde, an AI powered booking platform for Activities & Experiences, aspiring to revolutionize the way we travel and experience the world. Michael has extensive entrepreneurial experience as the co-founder of Ideas2life, AtYourService as well as Foody, an online delivery platform and one of the most prominent ventures in Cyprus’ digital landscape, acquired by Delivery Hero group in 2019. This journey & experience marks a vast expertise in building and scaling marketplaces, enhancing everyday life through technology and making meaningful impact on local communities, which is what Michael and his team are pursuing doing once more with Exyde www.goExyde.com
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Explore Tradeasia’s brochure for eco-friendly textile chemicals. Enhance your textile production with high-quality, sustainable solutions for superior fabric quality.
Best Crypto Marketing Ideas to Lead Your Project to SuccessIntelisync
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Building a diversified investment portfolio is a fundamental strategy to manage risk and optimize returns. For both novice and experienced investors, diversification offers a pathway to a more stable and resilient financial future. Here’s an in-depth guide on how to create and maintain a well-diversified investment portfolio.
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2. ENRON
Enron was an American energy, Commodities and Service Company based in Houston.
It was found in 1985 when there was a merger between Houston Natural Gas and
InterNorth.
Fortune Magazine published Enron in their Magazine as the most innovative company
of the US for straight 6 years.
Enron hired McKinsey & Company (a consultant company) to help Enron in different
business strategies as they were planning to start new businesses.
McKinsey & Company appointed Jeffrey Skilling as a consultant for this project. His
business strategies were proved to be good for Enron, So in 1990 Enron hired Jeffrey
Skilling.
After his appointment in 1990, Jeffrey Skilling hired Andrew Fastow who was famous
for making different complicated deals.
3. CHANGE IN PERFORMANCE REVIEW
SYSTEM
BEFORE
Respect
Integrity
Communication
Excellence
AFTER
Profit
4. HIGH RISK BUSINESSES AND DEALS
To grow its business, Enron entered many high risk businesses and made several
high risk deals. These businesses include;
Internet Broadband
Power Plants
Commodity Trading
Kenneth Lay (Enron’s Founder), Andrew Fastow and Jeffrey Skilling were planning to
make the company grow as soon as possible.
Company faced losses as many of the businesses and deals failed miserably.
To save Company’s image, they showed fake revenues in Company’s financial
statements. Besides that, they need to acquire more capital to generate more profits.
By doing so, they would be able to overcome their losses.
5. CHANGE IN THE ACCOUNTING METHODS
Jeffrey Skilling in 1992, made a proposal to US Capital Market Regulator to allow
Enron to use Mark-to-Market Accounting Method instead of Historical Cost
Accounting Method. US Capital Market Regulator accepted Jeffrey’s proposal.
A historical cost is a measure of value used in accounting in which the value of an
asset on the balance sheet is recorded at its original cost when acquired by the
company.
Mark to market is an accounting practice that involves adjusting the value of an
asset to reflect its value as determined by current market conditions.
11. MANIPULATION IN COMPANY’S FIGURES
1996 – Revenue ($13 billion) Profit ($584 million)
1997 – Revenue ($20 billion) Net Income ($105 million)
1998 – Revenue ($31 billion) Profit ($703 million)
2000 – Revenue ($100 billion) Profit ($979 million)
These figures help in increasing Enron’s share price although they were all fake.
12. SPECIAL PURPOSE VEHICLE (SPV)
A special purpose vehicle (SPV) is a
subsidiary company that is formed to
undertake a specific business purpose or
activity
17. Dot-com Bubble
Dot-com Bubble
The dot-com bubble, also referred to as
the Internet bubble, refers to the period
between 1995 and 2000 when investors
pumped money into Internet-based
startups in the hopes that these fledgling
companies would soon turn a profit.
When Dot-com Bubble Bursts
19. Bankruptcy
Once Enron’s plans of Reorganization was
approved by the U.S. Bankruptcy
Court, the new board of directors changed
Enron’s name to Enron Creditors Recovery
Corp. (ECRC). The company’s new sole
mission was “to reorganize and liquidate
certain of the operations and assets of the
‘pre-bankruptcy’ Enron for the benefit of
creditors.
The company paid its creditors more than
$21.7 billion from 2004 to 2011. Its last
payout was in May 2011
20. Criminal Charges
Kenneth lay (Enron’s founder), was
convicted on six counts of fraud and
conspiracy and four counts of bank fraud.
Prior to sentencing, he died of a heart attack
in Colorado.
Fastow, Enron’s former star CFO, pleaded
guilty to two counts of frauds and served
more than five years in prison. He was
released from prison in 2011.
Skilling, Enron’s former CEO, ultimately
received the harshest sentence of anyone
involved in the scandal. In 2006, Skilling was
convicted of conspiracy, fraud, and insider
trading. Skilling originally received a 17 and
a half year sentence, but in 2013, it was
reduced by 14 years. As a part of the new
deal, Skilling was required to give $42 million
to the victims of the Enron fraud. Skilling was
originally scheduled for release on Feb. 21,
2028, but was instead released early on Feb.
22, 2019.
21. New Regulations after Scandal
The Financial Accounting Standards
Board (FASB) substantially raised its
levels of ethical conduct.
Company boards of directors became
more independent, monitoring the audit
companies and quickly replacing poor
managers.
In July 2002, then-President George W.
Bush signed into law the Sarbanes-Oxley
Act (The Sarbanes-Oxley Act of 2002 is a
law the U.S. Congress passed on July 30 of
that year to help protect investors from
fraudulent financial reporting by
corporations). The act heightened the
consequences for destroying, altering, or
fabricating financial statements and for
trying to defraud shareholders.