The Enron Scandal Of Enron Essay

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
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Enron 's Impact On Enron
In 1985, two companies, Houston Natural Gas, and InterNorth merged to form Enron. Kenneth Lay
wanted to create a company that can supply electricity and natural gas at a much lower price. As
time went on, Enron ranked as the nation's sixth largest energy company with global internet trading
commodities in plastics, steel, petrochemicals and waste water to name a few (Fusaro, 2000, p.
157). From the time they merged to form Enron up to the point of their collapse, Enron's executive
committee had squandered many of the company's assets through bad strategies, hiding money, and
creating an illusion of a stable financial company.
Most of the top executives overstated Enron's earnings by several million dollars (Niskanen, 2005)
causing the company's stockholders to lose millions of dollars. Kenneth Lay who joined InterNorth,
later renamed Enron, in 1985 became the CEO the following year. In 1990, Kenneth Lay hired Jeff
Skilling to work in the operations department. Jeff Skilling would eventually take over Enron in
2001 as there Chief Executive Officer, replacing Kenneth Lay (Zimmerli, Richter, & Holzinger,
2007, p. 131).
There was no oversight in Enron's top managerial positions. Most of Enron's top executives
controlled all the schemes and allowed the accounting to create fraudulent documents to hide the
losses from investors. Enron was a public company which was run by Kenneth Lay and Jeffery
Skilling. They made up the top executive board which dealt in providing the means and

Enron And The Enron Corporation
Nearly all accounting instructors utilize the so–called "Enron Scandal" as a means to educate
students on accounting ethics and how regulations in the accounting world were enacted. The 2001
scandal involved two parties: Enron Corporation, a U.S. energy commodities firm, and their auditors
Arthur Andersen, LLP, currently a U.S. holding company and formerly one of the "Big 5" U.S.
accounting firms. When the scandal broke, Enron was one of the most innovative companies in the
world and Arthur Andersen was the biggest professional services company in the world; so, when
both companies fell, it completely changed the world of Accounting.
The Enron Corporation was founded in 1985 when Houston Natural Gas merged with InterNorth, a
Nebraska based Company. For six consecutive years thereafter, Enron carried the title of 'Americas
Most Innovative company' (Folger). The reason Enron was regarded as so innovative is that the
company completely changed the way the energy industry was run. In 1987, Enron's CEO Kenneth
Lay hired Jeffrey Skilling as a consultant to completely change the business strategy that the
company was run on. At that point, the company started taking advantage of the fact that the energy
industry was 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 transactions and assuming the associated risks"

Enron : The Collapse Of Enron
Enron was once one of the world 's leading energy companies by reshaping the way natural gas and
electricity were bought and sold. They filed the largest corporate bankruptcy in American history in
2001. Enron Corporation was an energy company running out of Texas that was started when two
companies, Houston Natural Gas and InterNorth, merged together in 1985. By 1992, Enron became
the largest seller of natural gas in North America and began to offer other services like wholesaler
trading and risk management. The company's popularity and profitability continued to increase
throughout the 90s and in 2000 was named number 7 on the fortune 500 list bringing in over 100
billion dollars of revenue. Enron shares were worth $90.75 at their peak in August 2000 and
dropped to $0.67 in January 2002. Enron announced a third quarter loss of $618 million on October
16, 2001. A couple days later, the SEC opened a formal investigation into Enron's transactions (Link
2). What caused this shocking fall of Enron? The fall of Enron was caused primarily by the
following three factors; the systemic failure by the Securities and Exchange Commission, hiring
auditors who were already affiliated with the company, and violating a code of ethics. The first
leading cause to Enron's downfall was the systemic failure of the Securities and Exchange
Commission. According to the Senate Governmental Affairs Committee, security regulators, rating
agencies and investment–bank analysts all failed to

The Downfall Of Enron
This is a movie or rather a documentary on the downfall of Enron which was the seventh largest
company in the United States. It took 16 years for them to rise from 10 billion dollars of assets to 65
billion dollars of assets and had managed to go bankrupt within a period of 24 days in 2001. This
led to the question of whether Enron is amidst an expensive scandal.
Some of the economic concepts that were identified in the documentary would be as follows. First,
Enron was built on the very concept of "Mark to Market Accounting". Second, through instruments
like "Special Purpose Entities" and an "Off–Balance Sheet", Enron abused these instruments to
deceive investors by hiding relevant information required for the investors. Third, a few aspects in
the movie were based on Gregory Mankiw's ten principles of Economics. People respond to
incentives, trade makes people better off, how government can improve market outcomes are few of
the principles identified in this movie. The concept of Supply and Demand was also identified in the
movie.
The ... Show more content on Helpwriting.net ...
It was earlier mentioned that the government should not interfere with the market as it would affect
the supply and demand. The government can interfere in situations of a market failure. One possible
way market failure is the market power. Market Power is basically the ability of a single person or
rather entity to unduly influence market prices. This is the very situation of Enron. Enron has taken
control over the electricity board and has unduly influenced the market prices by reducing the
electricity supplied. This is a perfect example of a market failure. Hence, the government should
ideally interfere in order to balance the prices between the demand and supply. This is also a
principle under the ten principles of economics which talks about "How Government can sometimes
improve market

The Fall of Enron
Case: The Fall of Enron
1. Why was Enron such an admired company prior to 2000? What innovation do they bring to the
table? Be specific and support your statement with concrete information.
Enron was an admired company prior to 2000 because at that time it surfaced as a frontrunner in the
deregulated energy market, making it possible to sell energy at higher prices, thus significantly
increasing its revenue. The company, through efficient management team, has built leading
businesses in energy trading and international energy asset construction. The company has managed
to maintain high return from its investments through ideal placement of resources by creating long
term and fixed price contracts with clients that guaranteed stable ... Show more content on
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The company was constantly emphasizing its stock price. The policy of stock option awards caused
management to create potential situations of rapid growth in efforts to give the appearance of
reported earnings to meet Wall Street's expectations. Although Enron's compensation and
performance management system was designed to retain and reward its most valuable employees,
the system contributed to a dysfunctional corporate culture that became interested only in short–
term profits to maximize bonuses. In addition, accounting results were recorded as soon as possible
to keep up with the company's stock price. This practice helped ensure deal–makers and executives
received large cash bonuses and stock options.
Enron's auditor firm was accused of applying thoughtless standards in its audits because of a
conflict of interest. The firm was generating a large amount of money for its consulting fees for
Enron. The firm's methods where questioned when it seemed as though the reports were completed
only for the annual fees to be collected. Furthermore, it was also criticized for lack of experience in
reviewing the files.
The Enron board of directors failed to closely analyze market trends, which would have led to better
decisions being made when it came to acquisitions and mergers. Because of this the company found
it

Enron Essay
An Explanation of the Causes and Effects of the Enron Accounting Scandals
Name: Do Minh Tam
Class: MEP 100
Lecture: Karen Bird
Date: December 24, 2010
Introduction
Background
From the 1980s until now, there have been a lot of accounting scandals which were widely
announced on by media. The result of this situation is many companies were bankruptcy protection
requests, and closing. One of the most widely reported emulation of accounting scandals is Enron
Company. Enron Corporation is one of the largest energy companies in the world. Enron was
founded in Houston, Texas, America in July 1985 by the consolidation between Houston Natural
Gas and InterNorth of Omaha, Nebraska ("Enron and Enderson: The story", n.d.). According to ...
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Endrew and his wife got benefits from Enron to buy Chewco where his wife is owner. He controlled
subsidiary companies to buy stock and hid debt for Enron. Enron did not follow the accounting
rules. Every mistake in accounting needs to note and describes for shareholders know, and writes on
the financial statements. In 2001, Accountants cannot combine Chewco into the Enron's financial
statement. This lead to misunderstanding report which show the financial statement of Enron such
as a decrease Enron income and an increase Enron's reported debt. In addition, Enron tried to make
maximize profits by break the law. Therefore, dishonesty in the financial statement, corruption and a
lack of knowledge and skills of accountants are the causes of the Enron's bankruptcy.
The Effects of Enron Accounting Scandal on
Employees and shareholders
When Enron was bankrupt, the most affected people are Enron's workers and shareholders. Many
people lost their jobs, their whole pension and all of the shareholders lost their money (Dunder,n.d.).
According to Raver (2006, p4–5), Enron stocks prices were increased nearly double in one year by
many ways such as legal and illegal way. The stock price was increasing so fast, many Enron
employees bought Enron stock as saving money, and also their pension are in Enron's stock too.
When Enron was failing, Enron's stock

The Collapse Of Enron And Enron
Abstract
Fortune used to rank Enron as the most successful business in the United States. The collapse of
Enron was shocked the whole world energy trading market. It caused significant losses to investors.
In this paper shows analysis reason of factors that lead to Enron demise and also lessons can be
learnt from Enron case study. The approach which have used in this paper to respond, the case study
question are the background of the case organization and how business structure had been use by the
case organization. Reviewing some lessons that can be learned from this case study to avoid any
failure another Enron whether in the financial market, as well as in the auditing and accounting
professions.
Introduction
Founded in 1985, from the ... Show more content on Helpwriting.net ...
At the time of Enron's formation, the gas marketing in U.S. was in the midst of deregulation. Before
1985, pipeline firms were required interstate pipeline in long–term commitment. It required
purchasing minimum gas volumes from producers that the price was exceeded market prices. Later,
the Federal Energy Regulatory Commission (FERC) established the rules in regarding to purchasing
and delivery of gas. Jeffrey Skilling realizes that Enron could gain advantage of the deregulation, as
it was the largest interstate pipeline company. Skilling advice Enron entered into long–term fixe–
price contracts with its customers by providing stable gas price for the length of time of the
contracts. At the same time Enron had signed long–term fixed–price contracts with its supplier to
avoid any uncertainty in future gas purchasing spot prices. In 1993, after Skilling joined Enron,
Enron earing $316 million in gas trading and becoming the largest gas seller of natural gas in North
America (Reference). As Enron holding heavy asset such as pipeline it increased the company debt.
Skilling recommended Enron to applied "asset light" strategy to reduced the company's debt burden.
In terms of management Enron had a biannual feedback system to evaluate and improve its
employees performance by hearing feedback from peers, customers and supervisors. Unlike other
industry, Enron's salary and bonus were

Enron And The Enron Company
was bought back and backdated on August 3rd when SPEs stock price hit $160 a share and booked a
$75 million gain, which delivered accounting benefits to Enron from complex and deceptive swap
transaction, while SPEs specialist and accomplices, according to Swartz and Watkins (2003: 310),
"earned" $58.9 (p.1221).
Giroux (2008) research found that the Enron executives make certain that its quarterly earnings
forecast are met due to their compensation package includes stock options, which stipulates that it is
only vested if the earnings targets are met (p.1217). Giroux summarized that the auditor, investment
bankers, analyst and politicians was under pressure by Enron as Anderson received $52 million in
audit, consulting fees and consulting contracts, as investment bankers benefited the cash and funds
Enron willing to spend on investment banking deals, as financial analyst maintain "strong buy"
ratings since most of the analyst worked for the investment banks that benefited millions for Enron
deals, as politicians received political contribution amounting to $7 million to both parties and
supported high ranking government officials in return of becoming influential in political
appointments and received billions of dollars of loans and benefits from international projects, and
concluded "the lack of obvious ethical constraints on any one 's part demonstrates a major facilitator
for Enron 's fraud" (pp.1221–1222). Giroux (2008) recapped as Enron's stock price declined from
$90

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
1) What important internal controls were ignored when LJM1 was created? LJM1 ignored some of
Enron's entries in the books that were missing. Outsiders owned less than 3% of the Special Purpose
Entities equities. There was an error made by Arthur Andersen to let LJM's financial statement to
remain unconsolidated. If the financial statements had been consolidated, some of the errors could
have been found. They may have even had some time to correct these errors before that had gotten
so far out of control. There was not governing controls in place and fraudulent activities were
unlimited. Andrew Fastow created LJM1 to handle investments with Rhythms NetConnections,
high–speed Internet service provider. The stock that they bought at $10 ... Show more content on
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c) Poor internal and management override of control. * Poor internal control exists when there is no
proper segregation of duties. For example, same person had custody of an assets is the same person
who is recorded it. Usually management override controls with the intention misstate the nature and
timing of revenue or other transaction. Example altering records and terms related to significant. d)
Deceiving parties outside the company include investors, creditors and regulators. * For example,
SME or even big companies in order for them to maintain their performance in financing reporting
is to get more people to invest. It possible they would manipulate by deceiving their financial
reporting to impress more investor to invest.
4. Yes, lack of clarity in Enron financial reporting is a red flag that could be the possibility of fraud.
Especially when the red flag is about Enron's pricey or increase of stock. Many of the owners of the
stock are not confident with Enron because of the unclear financial report and their inconsistency.
Some of them said that Enron is an earning at risk story. In 1990 around 80% of its revenues came
from the regulated gas–pipeline business. But Enron has been steadily selling off its old–economy
iron and steel assets and

Enron Conspiracy
Enron executives Ken Lay and Jeffrey Skilling were found guilty of fraud and conspiracy. Andrew
Fastow, Enron's CFO, cut a deal in a plea–bargain in which he testified against his former bosses.
The three of them have been called sociopaths. For instance, when Skilling took the stand he almost
seemed humble, and assured his innocence, claiming that Enron didn't do anything wrong.
When Skilling was hired, the staff that he motivated as being innovative and independent, used
accounting loopholes and poor financial reportings to hide billions of dollars in debt from failed
deals and projects. Enron looks like the perfect illustration of the bad barrel bad apple disease.
Enron's CEO Jeff Skilling, pursued a culture that would push through the limits, "Do it right, do it
now and do it better." he used to say. Skilling encouraged employers to be independent and
innovative. This gave rise to the pursuit of excellence, as executives worked to develop ways of
preserving Enron's success, when they unaware they were developing its downfall.
Enron's activities and decisions illustrate a range of characteristics discussed throughout the class, as
being involved in institutional sociopathy. Lack of Empathy, for instance, which means the
unwillingness of inability to recognize with the feelings and needs of others. Skilling embodies this
characteristics, because he resigned his position when Enron, a company that he claimed he loved
and cared for so much, was going bankrupt. Lack of

Enron Company : Enron Corporation
1. What was the case about?
This paper is about the auditing fraud that occurred within the American company called Enron
Corporation. Enron seemed to be one of the largest energy companies in America, but in reality, for
some years, it was not going very well with the company. Enron had more expenditures, cash going
out of the company, than revenues, cash inflows, causing them to experience severe loses.
Therefore, the poor numbers of company, which showed that the company was deeply in debt, were
removed from their accounting statements in order to make the company seem profitable; however,
it was all artificial. As a result, many people bought shares in Enron, because they thought it yielded
much, whereas it was actually worth nothing. ... Show more content on Helpwriting.net ...
Lay as a consultant to lead the company (Vermaas). The third man involved was Mr. Andrew
Fastow who was hired by Mr. Skilling to be Enron's Chief Financial Officer (CFO) (Vermaas). Mr.
Skilling became the face of Enron and his face appeared for many years on the covers of all major
business magazines. He determined the corporate culture of Enron. However, Mr. Fastow was the
one that invented the financial structures that made Enron become one of the seven largest
companies in the United States. Using Enron's shares as collateral, Fastow started developing
sketchy companies that were set up only to make fictitious business with Enron (Vermaas).
In addition, all major investment banks contributed to Fastows fake companies that took over the
poorly performing parts of Enron. As a result, the share price of Enron skyrocketed without a
product actually being sold to increase their turnover. No one made it clear that something was not
right even when there were visible investments that Enron made, such as a very expensive power
plant in India, whereby nothing was virtually gained. The lawyers did not have to agree, the auditors
should has said no, and the bankers should not have agreed. Thus, everyone who was supposed to
say no to this false representation of the earnings did exactly the opposite. They all raised their share
of the money in their own pocket. Not even the top executives of Enron disagreed with this fraud.

Enron And Corporate Culture Of Enron
Introduction
In 1985 The Enron Corporation came into existence after a successful merger between two gas
pipeline companies. The company nurtured a very competitive culture, which encouraged
employees to win at any means necessary. Enron's culture led employees to "cast loyalty and ethics
aside in favor of high performance" (Ferrell, p. 494). The executives of Enron covered up their
increasing debt by using special purpose entities. Meanwhile, Enron continued to report increasing
profits to their investors, which led to more investors giving Enron their money. There were many
factors that aided Enron in their demise, but the largest was the greed of Enron's executives, the
auditors, and the attorneys. The corporate culture of Enron, their auditors bankers and attorneys and
their Chief Financial Officer played vital roles in the fall of Enron.
How did the corporate culture of Enron contribute to its bankruptcy?
In its wake, Enron's CEO, Ken Lay, wanted Enron to be a company which cultivated a culture that
allowed employees the opportunity to reach their full potential. Lay wanted to make Enron a
company that had high integrity and moral values, but as time progressed Enron became a company
which pushed its integrity aside to engage in fraudulent behavior so that the executives could earn
more profit (Ferrell, p. 487). Enron's corporate culture would be best described as very proud and
arrogant. The company even displayed a banner in their lobby which stated, "The

Enron Case
Imane Malihi
Prof. Fred Friend
BLW411/511
March 27, 2014
The Downfall of Enron Corporation
"Ethics and integrity are at the core of sustainable long term success ... Without them, no strategy
can work and, as Enron has demonstrated, enterprises will fail. That's despite having some of the
'smartest' guys in the room." by Richard Rudden. As the quotation states, ethics and integrity play a
key role in the success of any corporation; through these principles, companies can ensure their
compliance with law, build a strong relation with their stakeholders, and create a positive reputation
in the market. However, this was not the case with Enron, America's energy giant. This company's
mission statement was stated that its performance was ... Show more content on Helpwriting.net ...
By 1993, in spite of the fact that some analysts were criticizing Enron for having high debt, the
company was employing financial professionals like Andrew Fastow, assigned by Skilling as a chief
financial officer, besides Jeff Skilling who were able to hide Enron's liabilities and growing the
market share of the company on the other hand; Due to this fact, Enron was named for six years
between 1996 and 2001 as "America 's Most Innovative Company."
It was believed by investors and creditors that Enron was the ideal place to invest their money due
to the effective performance shown in their financial reports. However, that picture was completely
fade as Skilling and his staff of executives were adopting creative accounting strategies for showing
that Enron is much powerful that it really is. For this purpose, Skilling was greatly investing and
competing with big financial corporations in the labor market by attracting MBA graduates to Enron
and this could only be done by providing luxuries and compensation benefits. In particular, the CFO
of Enron, Andrew Fastow, who played a big role on hiding the true financial position of Enron from
investors, collected more than $40 million in the year before Enron's collapse. According to Los
Angeles times, Enron paid millions to its 140 senior executives, an average of $5.3 million each.
But what about paying taxes? After all, such a financially strong company, of course, had

Enron In The 1990s
Enron was a business conglomerate during the 1990s, formed by the merger of smaller oil and
energy companies. Houston executives Kenneth Lay (Chairman), Jeffrey Skilling (chief executive
officer (CEO) and Andrew Fastow (chief financial officer (CFO) parlayed their new mega–company
into a favorite Wall Street company, bragging of record profits with negligible losses. During the
1990s, the three senior executives changed Enron from a traditional gas and electricity company
into a $150 billion energy corporation. For instance, from 1998 to 2000 only, Enron's returns rose
from approximately $31 billion to over $100 billion, making the company to be the seventh biggest
conglomerate of the Fortune 500. Unidentified to nearly everybody, this picture was the result of
one of the largest swindles in financial history (Ferrell, Fraedrich & Ferrell, 2013).
One of the key issues presented in the case was the shell game. Not every person knows this, but
prices of stock are based on how flourishing a company appears, not the amount of money it has in
the bank. Enron's top executives, helped by appropriate deregulation of the power–utility industry,
spin this dodge into a gold mine. They apparently posted profits founded on how much a particular
business enterprise could generate, not how much it was essentially worth, and covered losses
through offshore "shell" companies. The company's accounting firm, Arthur Andersen LLP, was
mature and well esteemed; not even a single person supposed

Enron : Enron And Enron
Enron was formed in July 1985 by the merger of InterNorth and Houston Natural Gas (Enron Fast
Facts, 2015). Kenneth Lay became chief executive of Enron and he hired Jeffrey Skilling to look
after the company's energy trading operation (The rise and fall of Enron, 2006). Skilling's plan was
to be basically a gas bank where buys gas from suppliers for future years at previously agreed prices
and sells the gas to its customers in advance to purchase at specified prices for future years. By
doing that, Enron was able to make money just as a bank would (Thomas, 2002). After seeing the
successful results, there was a new division managed by Skilling, Enron Finance created in 1990 to
begin selling financial instruments. Enron next step was Enron Online divisions and again it was
overnight success and handled $335 billion in online commodity trades in 2000 (Thomas, 2002).
Enron used a practice known as "mark–to–market" to report for its book and mark–to–market
accounting requires to revalue assets on the balance sheet that respond to the increased or decreased
market value and reports the difference as profit or loss on the income statement (Thomas, 2002).
Taking this as its advantage, Enron recognized profits on its futures that intended to be sold 20 to 30
years later with the price that is impossible to estimate and record the unreliable profits on its
income statement.
From the start of the 1990s until year–end 1998, Enron's stock rose by 311 percent and increased by
56

Enron 's Ethical Meltdown : Enron
Samantha Wu
Principles of Management
Professor Joel Reichart
Extra Credit for Final
September 6, 2016
Enron the Smartest Guys in the Room
Question 1 Summarize 1 one page how you would explain Enron's ethical meltdown: Enron was an
energy company founded by Kenneth Lay in 1985 through a merger of vast networks of natural gas
lines. Enron specialized in wholesale, natural gas, and electricity, and made its money as a
wholesaler between suppliers and customers rather than actually owning any. Enron in fact didn't
own any assets, which made their accounting procedures very unusual. The lack of accounting
transparency at Enron allowed the company's managers to make Enron's financial performance
better than it actually was. The organizational culture at Enron was to blame for it's ethical
meltdown. Enron's accounting scheme slowly began to erode its ethical practices, which soon led
the culture of Enron to become a more aggressive and misleading business practice. Enron reported
profits from joint partnerships that were not yet attained in order to keep stock prices up (or make
wall street happy). As this was happening employees began to notice the ethics in senior
management (leadership) deteriorating, and soon after they to would follow in their footsteps.
Senior management thought they were saving their company from financial ruin and though lying
was ok if it meant saving the company. Investors would surely sell their stocks if they really knew
the situation the

The Ethics Of The Enron Collapse Of Enron
Culture of Enron
Before Enron bankruptcy it was one of America's most powerful and successful energy companies.
The company thrived and pushed to be number one no matter the circumstance, in this company's
case if it meant doing it illegally. Fraud accounting, auditing, energy trading, and illegal finance was
the company's downfall leading to corruption and most of all greed. Enron was aggressive and a
competitive environment. The documentary was just not giving the name "The Smartest Guys in the
Room," for nothing, being an Enron employee that's the title everyone held. Enron's culture was a
rapidly changing environment created by the corporate's leadership and management. When you
hold the title of leadership you are responsible for ... Show more content on Helpwriting.net ...
Withdrawal involves resigning from the organization or getting a transfer in order to avoid having to
remain in a situation where an employee has to choose one value over another. The CEO of Enron,
Jeff Skilling resigned and led employees to believe that it was a personal reason but he left a couple
of year's right before the company went bankruptcy. Jeff skilling tried to avoid every situation but
everyone wanted answers. Someone at the top of their game just suddenly doesn't want a part of the
company he help build to be number one. Transformation occurs when an individual employee
alters his or her personal values to conform to the values of the organization. Rationalization occurs
when an employee adjusts his or her perception of right and wrong behavior in order to justify the
organization 's actions. For example the company might try to betray what they are doing is wrong,
but this and this is the only way to accomplish the job. After the resignation of Skilling, the
chairman Kenneth Lay took the CEO position and instead of him acknowledging that it was
problem he led everyone to believe otherwise. Lay showed confidence and encourage Energy
Companies and even employees not to withdraw their stocks no matter how much the company
continued to lose money. He always lead everyone there to think that the problem would be solved
like once before. He convinced them that there was no way that Enron could lose. Aggression
involves the situation an organizational employee

The Collapse Of Enron And Enron
Two organizations that will live on in infamy in the business world are World Com and Enron.
These names are synonymous with the largest corporate scandals in US history. Their failure to live
by ethical and moral codes resulted in bankruptcy, large financial losses to employees and
shareholders as well criminal penalties. Additionally, these deviations from ethical behavior from
several related parties shined a light on the accounting profession and resulted in several changes in
the industry that would strengthen ethical standards and make the accounting industry more reliable.
Below is an analysis of the Enron and WorldCom downfalls, with a focus on the ethical and
regulatory issues surrounding each organization.
Enron
The fall of ... Show more content on Helpwriting.net ...
The business world was amazed with how well the company was doing and its innovative business
practices. They were even recognized by Fortune Magazine as "The Most Innovative Company in
America. Over the next several years, Enron grew and their stock significantly outperformed market
expectations. This resulted in extreme pressures to maintain this success and ultimately resulted in
the downfall and bankruptcy of Enron in 2001.
The accounting scandal committed by Enron is somewhat complex and involves many serious
problems, but at a very high level, it stemmed from a few key areas, relating to improper financial
reporting and internal and external audit issues. The major financial reporting issues of Enron relate
to the accounting treatment of and Special Purpose Entities (SPEs) and Volumetric Production
Payments (VPPs).
Special purpose entities are companies that are created to help the main company manage risk. This
type of entity should be created by outside investors, who are independent of the main organization.
Unfortunately, Enron did not follow accounting rules as it related to SPE's and made multiple deals
that were not considered arm's length transactions, including some where employees of Enron were
managers of the SPE's. Some of the deals would not be favorable to the SPE's, however, they
resulted in dramatic increases to 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

Enron : The Collapse Of Enron
Abstract The scandal of Enron in 2001 lead the company to the bankruptcy. Enron is the largest
bankruptcy reorganization in American history at that time. Undoubtedly, Enron is the biggest
example of the audit failure. It is ever the most famous company in the world, but it also is one of
companies which fell down too fast. In this paper, it describe the reason why Enron became an
admired company in the world, the story of Enron 's rise and fall, the issues of internal and external
auditing in Enron, the breaches of accounting and ethics that carried by Enron.
Story of Enron In late 1970 's to early 1980 's, the competition in U.S. gas market lead the market
price of gas become unstable. There are three major types of economic units in the gas market, they
are suppliers, customers, pipeline companies. Suppliers and customers enter into a long term
contracts with pipeline company because of the uncertainty in the price of gas. Therefore, U.S.
government trying to control the price of gas by strictly regulation and caused shortage in gas
market. The situation became worse in middle of 1980 's. U.S. government started to deregulate the
gas industry and the demand for gas declined. Pipeline companies face many financial problems
with no customers. The deregulation create a short term volatility in gas price and making gas users
more challenging to do planning and pricing. At that time, Enron provided long term fixed contracts
to their customer and help the customers to

Enron Of Enron And Enron
Enron Cooperation, is a company that was based in Houston Texas and was an energy company.
This company filed bankruptcy in 2001 leaving a lot of its employees that had no knowledge about
what was going on jobless and the company investors losing a lot of money. This was one of biggest
companies in the united states, it had a lot of assets all over the country and was operating on a lot
of profit that nobody knew how and why. The movie, "Enron, The smartest guy in the room" shows
that the company was cooking their books making it look like the company was making a lot of
profit. The movie starts by introducing the big scandalous bosses of Enron, Chairman Kenneth Lay,
CEO Jeff Skilling and CFO Andrew Fastow. The narrator describes the company as a cooperation
that is greedy and fraudulent and later turns bankrupt. We are showed that top executives of Enron
held their own personal accounts and transferred a millions of dollars all the time. Their traders were
doing scandalous things by fixing the market so the people would invest in the company. Instead of
fixing this, Ken Lay is shown in the documentary sending an email to his traders saying they should
keep making the millions for the company. After one of the traders was arrested, Ken Lay needed
someone that would continue making money for the company. Jeff Skilling was appointed and came
up with the mark to market idea. This idea is defined in business as speculating the estimated profit
and making it as the actual profit

Enron And Enron Of Enron
"During the Enron debacle, it was workers who took the pounding, not bankers. Not only did Enron
employees lose their jobs, many lost their retirement savings. That 's because they were at the
bottom of the investing food chain." In July of 1985, Houston Natural Gas merged with InterNorth,
to create Enron, and Kenneth Lay became CEO the following year. In 1989, Enron began trading
natural gas commodities. In 1997, Andrew Fastow devised the first steps to hide debts and inflate
profits and one year later, he was named the CFO of Enron. In the year 2000, shares of Enron
reached a peak of $90. Enron claimed $101 billion in revenues, and as a direct result of this, became
the sixth largest energy company in the world. After all of these rapid ... Show more content on
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During the West Coast power crisis, homes went dark and street lights were out in California,
causing injuries and accidents. But the danger didn't stop Enron's energy traders from having a good
laugh. Newly released evidence shows that years before the crisis, Enron schemed to manipulate
markets. The new tapes routinely recorded by Enron to protect their own deals, and later obtained
by Snohomish County Public Utility District Number 1, confirmed what had been constantly
reported for four years. Enron secretly shut down power plants so they could cause, and then cash in
on, the crisis. Power plant operators were coached on how to lie to officials. Enron also pulled
power out of states like California, causing emergency conditions to worsen. The shut downs and
pull outs triggered sky high power prices and when states complained, the traders instructed the
states to leave them alone, and let them make a little bit of money. When the schemes began to
unravel, employees blamed the men running Enron. Mark to market accounting was introduced by
former Enron President and CEO, Jeff Skilling. This allowed Enron to book potential future profits
on the very day the deal was signed, even if some states had yet to deregulate their power markets.
No matter how little cash actually came in the door, to the outside world, Enron's profits could be
whatever Enron said they were. Enron's former CFO, Andrew Fastow, had his eye on John Olson,
one

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
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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

The, Enron, And Enron
The complete destruction of companies including Arthur Andersen, HealthSouth, and Enron,
revealed a significant weakness in the United States audit system. The significant weakness is the
failure to deliver true independence between the auditors and their clients. In each of these
companies there was deviation from professional rules of conduct resulting from the pressures of
clients placed upon their auditors (Goldman, and Barlev 857–859). Over the years, client and
auditor relationships were intertwined tightly putting aside the unbiased function of auditors.
Auditor careers depended on the success of their client (Kaplan 363–383). Auditors found
themselves in situations that put their profession in a questionable time driving them to ... Show
more content on Helpwriting.net ...
Competing interests can make it difficult to fulfill his or her duties impartially as an auditor. "A
person has a conflict of interest if (a) he is in a relationship with another requiring him to exercise
judgment in that other 's service and (h) he has an interest tending to interfere with the proper
exercise of judgment in that relationship" (Davis 1982: 485;Boyd 377–398). A conflict of interest
exists whether the act is unethical or ethical and can come visible lack of decorum that undermines
the confidence in the internal auditor, the audit activity, and the audit profession. (Institute of
Internal Auditors) A conflict of interest can impair an individual 's ability to do his or her duties and
responsibilities objectively. (Institute of Internal Auditors) Moral Seduction Theory (MST)
discussed by Andrés Guiral suggests that "auditors are morally compromised by the perceived
consequences of their opinions and the root of auditing problems seem to result in an unintentional
bias and not in dishonesty" (Guiral, Rogers, Ruiz, and Gonzalo 155–166) The moral–seduction
theory explains why professionals are at times unaware of how morally compromised they have
become by conflicts of interest (Guiral, Rogers, Ruiz, and Gonzalo 155–166).
Arthur Andersen was Enron's auditor and through Enron's financial debacle, Arthur Andersen

Enron : Enron And Enron
Introduction Enron lead the American energy, commodities, Enron Services was based in Houston,
TX. During the turn of the 21st century Enron had an employee base of 20,000 people on payroll.
Enron made profits by selling electricity, natural gas, communications, and pulp and paper. Enron's
revenues totaled over $101 billion in 2000. Due to Enron's earning Fortune named Enron as the
America Most Innovative Company. Enron was one of the biggest publicly traded companies and
highly trusted by all investors. Enron earnings flourished during the start–up of the computer
dotcom era in the 1990s. In November 1999, Enron build and launched EnronOnline site. This was
the first ever web–based transaction system allowing buyers and sellers to buy, sell, and trade
commodity products around the world. Enron peaked; $6 billion worth of commodities transacted
through their EnronOnline website daily. EnronOnline allowed for Enron stocks to transact with
participants in world energy markets. On their financial books Enron looked as they were doing
extremely well and many investors sought out to buy Enron's stocks. Enron net worth was about $70
billion, their shares traded for about $90 dollars each. Enron was known on Wall Street as a blue
chip stock and was considered to be very stable and trustworthy. Enron was named the fifth largest
company by Fortune 500. Enron lead the market in energy production, distribution, and trading.
Stakeholder Analysis

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

Enron 's Culture Project : Enron
Miranda Vehlewald
Enron Ethical Culture Project
Part 1: Enron's Culture Enron started out as a dominant culture. Kenneth Lay and Jeffrey Skilling
had a vision of how they wanted the company to be and where they wanted it to go. When Lay put
Skilling in charge, he made it his mission to hire the best traders, recruiting them from the best
schools and other companies. They gave employees corporate rewards like concierge services and a
company gym. As the company grew larger, the culture began to take a turn for the worse. Enron
demonstrated a few cultural dimensions such as high risk–taking, outcome orientation, and
aggressiveness. Skilling established the Performance Review Committee which was an extremely
harsh ranking system. It was ... Show more content on Helpwriting.net ...
With the rating system, employees were so paranoid about losing their jobs, that they made any kind
of deal they could to post earnings, even if it was only beneficial in short term. They began to turn
their backs on each other through increased secrecy and competitiveness. With mark–to–marketing
accounting, Enron created the markets that determined the values of their assets. When Enron
signed contracts, they immediately reported their estimated earnings and made up numbers. Skilling
and Fastow overestimated asset values so it was more attractive in the market, bringing in more
earnings. When Andrew Fastow became in charge of the SPEs, things got more complicated and he
began to use them in an unethical manner. He used SPEs for assets that were falling in value so they
could be kept off Enron's books. He began to run controversial SPEs himself, which paid him
millions of dollars in management fees. He also went against accounting principles when he
increased notes receivable and shareholders' equity. At the beginning of Enron's existence, ethics
and integrity were important to the company. They had a code of ethics and mentioned integrity as
one of their principles of human rights. That began to change when Ken Lay hired Jeff Skilling to be
put in charge, who in turn hired Andrew Fastow. Skilling and Fastow were only concerned about

Enron And The Collapse Of Enron
INTRODUCTION
Enron, one of the most influential and profitable companies in utility, paper, and communications
for numerous years, came crashing down and filed for bankruptcy in fall 2001 (Bottiglieri, Revile,
and Grunewald 1). Houston National Gas and InterNorth fused together and created Enron in 1985.
The company faced initial problems of debt and loss of exclusive rights to pipelines (Thomas 1).
This accounting method allowed Enron to log entire profits from the life of a contract in the year the
company made the deal (Stewart 116).
Three individuals and one firm had major impacts in the collapse of Enron, which were Kenneth
Lay, Jeffrey Skilling, Andrew Fastow, and Arthur Andersen Accounting Firm. Kenneth Lay was the
Chief Executive Officer when the company began in 1985. (Cunningham and Harris 32). Jeffrey
Skilling was another key individual in the story of Enron and made his first major appearance in
1990. He held many titles at Enron, including president and Chief Financial Officer, and Chief
Executive Officer (Chandra 100). The third individual is Andrew Fastow, who also joined Enron in
1990. Fastow's major contribution to Enron was the use of special purpose entities. SPEs allowed
the company to keep losses and debts off Enron's financial statements and dump them in other
hidden areas (Chandra 101). The final group was Arthur Andersen. Arthur Andersen's biggest
impact on Enron was the allowance of mark–to–market accounting, which allowed Enron to record
all

Enron Of Enron And Enron
Enron was formed in 1985 from the merger of two gas companies from Texas and Nebraska. Enron
became the first company with all–American network of gas pipelines. In 1997 Enron bought power
generating company "Portland General Electric Corp." worth $ 2 billion. Before 1997 ended, the
management turned the company into "Enron Capital & Trade Resources" which became the largest
American companies that trade in natural gas and electricity. Revenue increased dramatically from $
2 billion to $ 7 billion by employees grew from 200 to 2,000 people.
Enron formed also "Enron Online" (EOL) in October 1999. The EOL is a business unit of Enron
that online marketing of energy products electronically through the website. In an instant, EOL
successfully ... Show more content on Helpwriting.net ...
European operations reported for bankruptcy on November 30, 2001, and two days later, on
December 2, in the US Enron filed a request for protection of Chapter 11. At that time, the case was
the largest bankruptcy in US history and led to 4,000 employees lost their jobs. Lawsuits against the
directors of Enron, after the scandal, it stands out for its directors settle the lawsuit by paying huge
amount of money in private. In addition, the scandal caused the dissolution of Arthur Andersen
accounting firm, which consequently be felt among the wider business world.
Enron began to unfold in December 2001 and continues to roll in 2002 is very broad implications
for global financial markets were marked by declining stock prices drastically various stock
exchanges around the world, from America, Europe, to Asia. Enron, a company that ranks seven of
five hundred leading companies in the United States and is the largest energy company in the US
went bankrupt with debts left nearly US $ 31.2 billion.
In the case of Enron known occurrence of moral hazard behavior include the manipulation of
financial statements by recording a profit of 600 million US dollars when the company suffered
losses. Manipulation of profits due to the company 's desire that the stock remains attractive to
investors, this scandalous case involving the allegedly participated in the White House, including
the vice president

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

Enron
Abstract
The financial collapse of Enron had substantial and far–reaching ramifications throughout the
financial investment field, tax compliance professions and the accounting profession. Intense
Congressional scrutiny resulted in a new era of transparency in financial reporting, stricter reporting
standards as provided in Sarbanes–Oxley and substantial penalties for failure to comply with new
financial reporting and tax compliance standards in the Internal Revenue Code (Bottiglieri et. al.,
2009)
Enron Assignment
The Enron scandal, revealed in October 2001, eventually led to the bankruptcy of the Enron
Corporation, an American energy company based in Houston, Texas, and the dissolution of Arthur
Andersen, which was one of the ... Show more content on Helpwriting.net ...
UC 's law firm Coughlin Stoia Geller Rudman and Robbins, received $688 million in fees, the
highest in a U.S. securities fraud case (DeBare, 2008). At the distribution, UC announced "We are
extremely pleased to be returning these funds to the members of the class. Getting here has required
a long, challenging effort, but the results for Enron investors are unprecedented (Davis, 2008).
Sarbanes–Oxley Act
Between December 2001 and April 2002, the Senate Committee on Banking, Housing, and Urban
Affairs and the House Committee on Financial Services held numerous hearings about the collapse
of Enron and related accounting and investor protection issues. These hearings and the corporate
scandals that followed Enron led to the passage of the Sarbanes–Oxley Act on July 30, 2002
(Chhaochharia & Grinstein, 2007). The Act is nearly "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 (Deakin & Konzelman, 2003).
The main provisions of the Sarbanes–Oxley Act included the establishment of the Public Company
Accounting Oversight Board to develop standards for the preparation of audit reports; the restriction
of public accounting firms from providing any non–auditing services when auditing; provisions for
the independence of audit committee members, executives being required to sign

Enron And The Collapse Of Enron
Imagine that we were stockholders of one of the biggest company, and our stock value has been on
the rise and is now up to almost 100 dollars a share, but one day, our share value drops below one
dollar. This happened to shareholders of Enron. The total debt amounted to over $ 16 billion, which
was the largest corporate bankruptcy in American history. Shareholders lost 60 billion dollars within
a few days, 4500 employees lost their jobs, and the employees lost billions in pension benefits. I had
never heard the name of Enron nor Enron's scandal until I watched a film, "Enron: The Smartest
Guys in The Room," but I realized the Enron scandal affected the whole of the business in the
United States.
What were the causes of the collapse of ... Show more content on Helpwriting.net ...
When the Securities and Exchange Commission was formally looking into Enron, Andersen
employees shredded important documents about Enron 's finances. In fact, Enron had payed huge
money to Arthur Andersen every month, and the relationship between Enron and Arthur Andersen
was so intimate that Arthur Andersen worked as an auditor.
What was the effect of the Enron scandal upon the accounting industry?
This Enron 's scandal led to new regulations and lawmaking to promote the accuracy of financial
reporting for companies. Sarbanes–Oxley (SOX) was legislation passed by Congress in July of 2002
and then signed by President George W. Bush. SOX requires companies to review internal control
and take responsibility for the accuracy and completeness of their financial reports. Also, SOX made
it a criminal offense to falsity financial statement. In it, about half of the language deals with setting
up a new regulator for the accounting profession called the Public Companies Accounting Oversight
Board (PCAOB) that oversees the audit firms (Financial & Managerial Accounting, P11). The rest
of the legislation deals with some important things like ensuring that management is held
accountable for the financial reports that they file with the SEC. It improves the independence of
corporate boards, as well as the independence of the auditors, and it increased

Enron : The Demise Of Enron
Enron was a corporation that reached heights unknown, only to watch it fall apart from the inside
out based on a foundation of falsehoods and cheating. Enron established a business culture that
flourished on competition and was perceived in society as an arrogant corporation, mainly because
of its corporate leadership. The fairytale of Enron actually ended as a nightmare with it destroyed by
one of America's largest bankruptcies in history. The demise of Enron impacted the livelihood and
futures of numerous employees, their pensions, and in due course impacted Wall Street in a
significant way. Even people today are amazed at how such a powerful company met its demise so
rapidly. Enron's end was a product of greed when certain executives of Enron were not eager to
accept the failure of their company. The company utilized mark–to–market accounting that detailed
the projected impending profits from a long–term deal (Lawry, 2015, p. 28) The results of the deals
did not generate revenue as anticipated, but tremendous loss instead. This resulted in Enron
accumulating enormous amounts of debt that they attempted to keep classified from the public.
Ultimately the truth came to fruition.
Presently, Assurant has many formal policies in place, but as with any Fortune 500 company,
informally – there is much work to be done and improved upon. Assurant may not be founded on
deceit per say, but the insurance business is "business" and leaves a bad taste in many people's
mouths. Documents,

Enron Of Natural Gas Pipelines Enron
Introduction In 1985 after federal deregulation of natural gas pipelines Enron was formed through a
merger of Houston Natural Gas, and Nebraska pipeline company Internorth. Enron went on to create
energy derivatives and in 1990 formed Enron Finance Corp. By 1996 Enron had also formed Enron
Capital and Trade Resources increasing their growth from $2 billion to $7 billion and increasing
division employment from 200 to 2,000. In 1999 Enron entered the technology market by creating
Enron Online (EOL). By August of 2000 Enron stock hit its zenith at $90.56/share and the firm was
widely admired and emulated. Behind the scenes Enron faced increasing market competition and
energy prices began to decline as the world economy entered into a recession. Enron began to use
related party transactions and special purpose entities (SPEs) to obscure the firm's leverage ratios in
order to maintain their credit rating. It would be the use of the SPEs that eventually cause Enron to
materially restate their financials resulting in their insolvency and demise in 2001 (Thomas, 2002).
Issues
Numerous factors impacting Enron lead to perceived solutions exacerbating the issues and
escalating the magnitude of fraud perpetuated. As time progressed Enron faced increasing
competition while simultaneously enduring the effects of the beginning of economic recession. The
above issue increased the pressure on executives to continue posting performance numbers despite
the reality of outside

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
The Illusion That Took the World by Surprise
Enron: The Smartest Guys In the Room is a movie about Enron and how it fooled the world into
believing it was one of the most stable and profitable companies in the U.S. This is very sad because
many people believed in the figures Enron was producing and entrusted their life saving in Enron
stock. The scandal didn't just affect a small group of people but 10's of thousands of people lost
everything, due to an illusion.
Kenneth Lay earning a Ph.D. in economics at the University of Houston joined Houston Natural
Gas Co. as chairman and CEO. The company merged with InterNorth in 1985, and was later
renamed Enron Corp. In 1986, Lay was appointed to chairman and chief executive officer of ...
Show more content on Helpwriting.net ...
It started with the Valhalla scandal where he begged traders to gamble with millions in the gas
commodity sector then he hired Skilling to run the financials and bring mark to market so he can
manipulate the balance sheet. Then allowing Fastow to make hundreds for false partnerships to hide
debt. There was no length that Lay wouldn't go to in order to see his company succeed.
In 2001, Lay sold large amounts of Enron stock in September and October as its share price fell. All
told, he liquidated more than $300 million in Enron stock. Enron filed for bankruptcy in December
2001–the biggest bankruptcy filing in U.S. history at the time, costing 20,000 employees their jobs
and many their life savings, and losing billions for investors. In July 2004, Lay was indicted for his
role in the company 's collapse, including 11 counts of securities fraud, wire fraud, and making false
and misleading statements. On May 25, 2006, Lay was found guilty on all six counts of conspiracy
and fraud. His sentencing was scheduled to take place on October 23, 2006. But died of a heart
attack while on vacation in Colorado.
Skilling unexpectedly resigned and sold almost $60 million in Enron shares. The company declared
bankruptcy in December 2001. Jeff Skilling was convicted of multiple federal felony charges in
2006, which including insider trading, securities fraud, and making false statements to

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