charges relating to the Enron scandal. Although Arthur Andersen still technically exists as a company‚ and despite the verdict in relation to the criminal charges being overturned by the US Supreme Court‚ Arthur Andersen has arguably suffered too great a level of damage to its reputation to immediately return to its former position. Most analysts now speak of a ’Big 4 ’ following the troubles that hit Arthur Andersen. Arthur Andersen was essentially brought down by the Enron scandal‚ which erupted
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Enron Corporation Question 1‚ In my point of view‚ the parties are most responsible for the “crisis of confidence” on the part of the public in the accounting profession as following. • The parties who create these auditing standard rules‚ such as SEC‚ Auditing Standard Board. They should publish the Sarbanes-Oxley Act earlier. They should be considered the non-auditing services for auditing clients is a serious issue earlier. • The auditors of the Andersen firm. They didn’t do their
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(FV-OCI)—December 31‚ 2014 Securities Cost Fair Value Anderson Corp. Munter Ltd. King Corp. Total of portfolio $48‚750 580‚000 255‚000 $883‚750 $49‚580 569‚500 254‚400 $873‚480 Note: Balance in AOCI‚ December 31‚ 2014 = $10‚270 debit ($873‚480 – $883‚750) since all securities were purchased in 2014. The Anderson shares make up $49‚580 - $48‚750 = $830 credit of this. Sale of Anderson shares‚ January 15‚ 2015: Gross selling price of 2‚500 shares at $21$52
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4.1 Enron Corporation and Anderson‚ LLP ----Analyzing the fall of two Giants This case results in the publishing of Sarbanes-Oxley Act of 2002 and relevant to the Securities and Exchange Commission. Also‚ it is related to SAS 103: Auditing‚ Quality Control‚ and Independence Standards and Rules. [1] What were the business risk Enron faced‚ and how did those risks increase the likelihood if material misstatements in Enron’s financial statements? The business risks Enron faced are as following:
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Enron Corporation and Andersen‚ LLP Accounting Fraud and Auditor Legal Liability 1 - What were the business risks Enron faced‚ and how did those risks increase the likelihood of material misstatements in Enron’s financial statements? The business risks that Enron faced included foreign currency risks and price instability‚ which is common for the energy industry. In addition‚ Enron faced pressure to perform well so that the stock price would rise. These risks increased
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Enron 1. How did the corporate culture of Enron contribute to its bankruptcy? There was an overwhelming aura of pride‚ carrying with it the deep-seated belief that Enron¡¦s people could handle increasing risk without danger. The culture also was about a focus on how much money could be made for executives. For‚ example Enron¡¦s compensation plans seemed less concerned with generating profits for shareholders than with enriching officer wealth. Enron¡¦s corporate
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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)
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Enron Corporation (former NYSE ticker symbol ENE) was an American energy‚ commodities‚ and services company based in Houston‚ Texas. Before its bankruptcy on December 2‚ 2001‚ Enron employed approximately 20‚000 staff and was one of the world’s major electricity‚ natural gas‚ communications‚ and pulp and paper companies‚ with claimed revenues of nearly $101 billion during 2000.[1] Fortune named Enron "America’s Most Innovative Company" for six consecutive years. At the end of 2001‚ it was revealed
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wife and children‚ was a company created in 1998 by Enron ’s CFO‚ Andrew Fastow‚ to buy Enron ’s poorly performing stocks and stakes and bolster Enron ’s financial statements. Fastow proposed in October 1999 to Enron ’s finance Board the creation of LJM2 Co-Investment L.P. Fastow would act as general director of a much larger private equity fund that would be funded with $200 million of institutional funds. The question of Fastow’s dual role as Enron ’s CFO and LJM2 ’s general director was not viewed
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Enron: The Fall from Grace/ The World’s Biggest Fraud Outline A. Enron’s History B. Overview of Enron’s Operations 1. Wholesale Services 2. Energy Services 3. Global Services C. Enron’s Timeline D. Enron’s Role in The Energy Crisis in California E. The Fall of Enron F. Why Enron Fell from Grace? G. The Crash of Enron 1. Key Management at Enron 2. Enron’s Auditor 3. Credit Rating Agencies 4. Investment Banks 5. Links with The Government (Bush Administration) 6. The Link of Enron with The British
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