auditing fraud comparison, may include some mistakes because we have done this for assignment purpose.

2. INTRODUCTION TO ACCOUNTING
SCANDALS:
 Accounting scandals are business scandals which arise from
intentional misrepresentation or alteration of financial
statements regarding sales, revenues, expenses and other
factors for a profit motive .

3. ACCOUNTING SCANDALS
Accounting Fraud involves an employee, account or
corporation itself and is misleading to investors
and shareholder.
A company can falsify its financial statements by
 misusing or misdirecting funds
 overstating revenues or the value of corporate assets,
 understating expenses or underreporting the existence
of liabilities.

4. ACCOUNTING SCANDALS’ COMPARISION
BETWEEN

5. PROBLEM STATEMENT:
 .The Enron & El Paso companies’ statements
about profits were shown to be untrue, with
massive debts concealed so that they didn’t show
up in the company’s accounts.
 The companies’ use to misstate earnings and
modify the balance sheet to portray the favorable
performance in the eyes of auditor and customers.

6. ENRON CORPORATION:
 Enron Corporation - American largest electricity, natural gas,
communications, pulp and paper company based in Houston,Texas
 It was founded in 1985 as a merger between Houston Natural
Gas and Inter North, small regional companies.
 Employed approximately 20,000 staff.
 Transmission systems in the world, totaling more than 36,000 miles.
 Revenues of nearly $111 billion in 2000.
 Fortune Magazine named Enron “America’s Most Innovative
Company” for six consecutive years.

7. What made it a “Scandal” ?
The bankruptcy of Enron shook the entire system. Some
highlights exposed were:
1. $30 million of self-dealings by the Chief Financial Officer.
2. $700 million of net earnings disappeared.
3. $1.2 billion shareholder’s equity disappeared. 4. Over $4
billion in hidden liabilities.
Many of Enron’s recorded assets and profits were inflated
or even wholly fraudulent and non-existent.

8. ENRON’s SCANDAL OVERVIEW

9. THE MAIN KEY PLAYERS INVOLVED
IN FRAUD

10. THE WHISTLE BLOWER

11. EL PASO CORPORATION:
 El Paso Corporation was a provider of natural gas and related
energy products.
 It was one of North America's largest natural gas producers
until its acquisition by Kinder Morgan in 2012.
 Headquartered in Houston,Texas. United States.
 Employed 6,000 people.
 In 1999 the company doubled in size when it merged
with Birmingham, Alabama based natural gas giant Sonat.

12. EL PASO’S SCANDAL OVERVIEW
 Tax avoidance:
In December 2011, the non-partisan organization Public
Campaign criticized El Paso for spending $2.94 million
on lobbying and not paying income taxes during 2008-
2010, instead getting $41 million in income tax rebates,
despite making a profit of $4.1 billion and increasing
executive pay by 47%.
 Price fixing:
On 27 September 2002, the company helped illegally
drive energy prices to record highs in California between
2000 and 2001 by manipulating gas supplies.

13. TEMPLATE OF LITERATURE REVIEW

14. CONCLUSION:
 The Enron scandal was a mixture of audit failure, accountant
deception, the absence of operational audit, and lack of
internal control insufficiencies.
 With the enforcement of the Sarbanes-Oxley Act,
organization will be able to identify internal weaknesses,
develop new policies and procedures, and have a more
compliant culture within the organization. In addition,
requiring corporate governance more independent audits, as
well as operational audits which would require testing the
systems of internal control.

15. CONTINUE….
 El Paso Corporation and its subsidiaries with
the assistance of a couple of former
employees, provided fraudulent financial
reporting.
 El Paso Corp. had a material weakness in its
internal controls which led to inadequate
control over the booking of its oil and gas
reserves, system access, documenting policies
and procedures, and monitoring compliance
with existing policies and procedures.