Part B: What role did the CFO play in creating the problems that led to Enron’s financial problems? In order to prevent the losses from appearing on its financial statements‚ Enron used questionable accounting practices. To misrepresent its true financial condition‚ Andrew Fastow‚ the Enron’s CFO‚ takes his role involving unconsolidated partnerships and “special purpose entities”‚ which would later become known as the LJM partnership. Taking advantage from the SPEs’s main purpose‚ which provided
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Arthur Andersen The name Arthur Andersen is a very well known name among households in the world today. At one time‚ the reputation of Arthur Andersen was very positive. However‚ the risky and unethical decisions that were made over the ending years by top management‚ gave Arthur Andersen a famous name with not such a positive reputation. Arthur Andersen became involved in many scandals with the largest being that of Enron Incorporated. Poor decision making by upper management and issues with
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Professional Standards IT/237 October 31‚ 2012 Professional Standards In this paper we will look at <meta> tags being used to promote accessibility and search engine optimization. We will also look at why it is important to have professional standards in web development. These two items are very important to consider when designing and developing a website. Meta tags‚ which are “tags that include information such as the page author or description” (Martinez‚ n.d.). Meta tags are used
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Overview Enron Corporation‚ once the 7th largest company in US and a global leader of electricity and natural gas industries‚ filed for bankruptcy protection in late 2001. It was revealed that the company had been hiding investment losses and created fictitious revenue through several complicated accounting gimmicks. Besides Enron’s senior management who created the whole fiasco‚ many people believed that several other parties‚ such as the Board of Directors and the external auditors should also
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Issues In Auditing and Professional Practice ASSIGNMENT QUESTIONS The questions in this assignment are extracted from the text book for this paper; Reference: Johnson‚ R. (ed)‚ Readings in Auditing Volume 2‚ John Wiley & Sons Australia‚ 2007. Answer the following 4 questions: Question 1: (Chapter 10 “Australian Wheat Board”‚ p135 Question 4) Discuss the lessons to be learnt from the AWB scandal. Question 2: (Chapter 12 “Fraud prevention and detection- further guidance”‚ p158 Question 3)
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Enron Case The internal controls that were ignored when LJM1 was created were one‚ LJM’s books were kept separate from Enron’s. 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
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MINI CASE: THE FILURE OF CORPORATE GOVERNANCE AT ENRON 1.Which parts of the corporate governance system‚ internal and external‚ do you believe failed Enron the most? In the evaluation of the Enron’s case; by trying to see the very big picture‚ it is not only about that the internal part of the corporate governance system was failed or but also the external part of the corporate governance system was also failed. As noted on the last paragraph of the mini case‚ many people from different positions
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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
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1) What did Arthur Andersen contribute to the Enron disaster? Arthur Andersen (AA) contributed to the Enron disaster when it has failed to the management by failing to have Enron establish and enforce its own internal control. There has been flaws to AA‘s internal control. There has been assumption that AA partners were too motivated by revenue recognition thus‚ overlooking several criteria when providing their services to Enron. Additionally‚ AA also recognised the retention of audit clients
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Business Ethics Decision-Making Cases Write-ups Arthur Andersen: Questionable Accounting Practices Name: Wen Jiangshan Student ID:2011008274 Part I. Summary of the case Case 2 mainly introduces how Arthur Andersen‚ who used to be one of the “Big Five” largest accounting firms in the United States‚ strayed away from accepted policies and stuck in a string of accounting scandals‚ finally closed its doors after 90 years of business. The firm’s name was synonymous with
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