Enron And The Enron Corporation - 2203 Words

Nearly all accounting instructors utilize the so-called â€Å"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 â€Å"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 â€Å"†¦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†Show MoreRelatedEnron Corporation : The Enron Scandal Essay1172 Words   |  5 PagesThe Enro n Scandal The objective of an audit is to â€Å"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, leadingRead MoreEnron Scandal Of Enron Corporation Essay1145 Words   |  5 PagesIntroduction 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 situationRead MoreEnron Company : Enron Corporation2724 Words   |  11 Pages1. 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, wereRead MoreThe Enron Corporation Scandal 1791 Words   |  7 PagesPRACTICES 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 proï ¬ tability and indebtedness that befell the corporation (A. Holt and T. Eccles, 2002) The accounting practices involvedRead MoreThe Ethics Of The Enron Corporation1908 Words   |  8 Pages October 2, 2015, news broke that Enron Field was still the legal name of Minute Maid Park in the Texas comptroller’s office. Even after a 15 year period of change here in Houston, Texas, there are still small remembrance that the Enron Corporation was a large part of the Houston culture. Enron’s hold has been just as gripping 15 years after its closing as it was when it was a thriving vivacious company throughout the 1990 s and early 2000 s. As H ouston’s economy is in quite the upswing; Enron’sRead MoreThe Collapse Of Enron Corporation1787 Words   |  8 Pagesthere somewhere.† -Daniel Henninger, The Wall Street Journal The collapse of Enron Corporation has created many discussions about the structure of corporate governance. The question of this essay first calls to examine some of the strengths and weaknesses of the shareholder model of corporate governance and how the fundamental principles of this model were instrumental in the disintegration of Enron. In particular, I will discuss Deakin’s article about the third position addressing howRead MoreThe Collapse Of Enron Corporation1547 Words   |  7 Pagesthe Enron Corporation and how the collapse of Enron Corporation consequence affected the United states financial market. Enron Corporation was the seventh largest company in the United States, and had the biggest audit failure. In this Research paper, it describes the reason of Enron Corporation collapse, including details of the internal/ external management, accounting fraud, and conflict of interest. Enron is the largest bankruptcy in America history! The Collapse of Enron Corporation andRead MoreThe Collapse Of Enron Corporation1988 Words   |  8 PagesIntroduction: The abrupt and unanticipated collapse of Enron Corporation was due to one of the largest accounting frauds in U.S. history. This scandal had significant impact on the financial markets by causing enormous financial losses for numerous investors. Before filing for Chapter 11 reorganization bankruptcy protection in December of 2001, Enron was named the Most Innovative Company in America by Fortune Magazine from 1996 to 2001, and also named first in 1999 on its list of the 100 BestRead MoreEnron : An Overview Of The Corporation Essay2236 Words   |  9 Pagesthe Corporation Enron was a major commodities and energy company that was headquartered in Houston, Texas. It was a company once very respected and, in the eyes of the public, very profitable. It placed in the top 20 on the Fortune Global 500 in 2000, and its stock was considered at a time to be blue chip, guaranteed to make stable gains over time. Enron formed as a merger between two natural gas companies, Houston Natural Gas and InterNorth, officially becoming the company known as Enron in 1979Read MoreThe Leadership Of The Enron Corporation935 Words   |  4 Pagesorganizations and specifically at Enron. Leadership of the Enron corporation was a group of high payed executives. Their mission statement claimed they â€Å"treat others as we would like to be treated ourselves....We do not tolerate abusive or disrespectful treatment. Ruthlessness, callousness and arrogance don t belong here. (Revolutionary Worker 2002) However, â€Å"as in other aspects of Enron’s culture, the appearance did not match reality.† (Stephens and Behr 2002) Enron could become an â€Å"energy broker†