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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fraudulent accounting practices that led to the collapse of Worldcom. Other objectives of this paper will be to demonstrate how these activities were able to go undetected. Also‚ what motives drove the individuals involved to commit these acts. And finally the ethical accounting issues involved. Worldcom got its start as a small discount long distance provider in Mississippi. Founded by Bernard Ebbers and a number of others the idea for Worldcom was simple‚ buy long distance services from larger companies
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Case Study: Enron Corporation Accounting Scandal 1. What is Enron Scandal? Formed in 1985 from a merger of Houston Natural Gas and Internorth‚ Enron Corp. was the first nationwide natural gas pipeline network. Over time‚ the firm’s business focus shifted from the regulated transportation of natural gas to unregulated energy trading markets. The guiding principle seems to have been that there was more money to be made in buying and selling financial contracts linked to the value of energy
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Enron and its Associates Used Questionable Accounting Practices Clearly‚ there have been cases where management knowingly deceived the auditors. Then there seem to be other instances where the accounting treatment envelope was pushed just a bit too far. In the case of Enron‚ David B. Duncan‚ the former Andersen partner in charge of the Enron audit who was the government’s chief witness in the trial against Arthur Andersen‚ stood behind the decisions that resulted in the widespread use of off-balance
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Examining a Business Failure: WorldCom WorldCom was one of several large companies that failed because of inadequate organizational leadership‚ fraud‚ conspiracy‚ falsifying documents‚ and embezzlement. WorldCom has been classified as being “one of the biggest corporate scandals in Unites States history” (Zekany‚ 2004‚ p. 101). In 2001‚ the company’s financial condition began to decline due to the slowing telecommunications industry‚ which eventually put pressure on the company’s executive
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Corporate Governance WorldCom Scam Introduction MCI WorldCom was one of the largest telecommunications companies in the world. Bernie Ebbers founded WorldCom in 1983‚ after that WorldCom began as a re-seller of long-distance telephone services. WorldCom is located at Mississippi. After Ebbers bought around 50 other small long-distance firms‚ he set his sight on MCI. Thus MCI WorldCom would have become the second biggest telecom service provider in 1997. MCI WorldCom was formed on September-15-1998
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MD. ZULKIPLI MATRIC NO : 1333430136 Dr. Abdullah bin osman Enron : Questionable Accounting Leads To Collapse History ENRON CORPORATION. Enron‚ a corporation headquartered in Houston‚ operated one of the largest natural gas transmission networks in North America‚ totaling over 36‚000 miles‚ in addition to being the largest marketer of natural gas and electricity in the United States. Enron managed the world’s largest portfolio of natural gas risk management contracts and
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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
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Enron and How it Affected the Accounting Industry Enron once was one the United States largest energy company and was ranked Fortune’s seventh richest corporation in the United States. When Enron had a filed for Chapter 11 bankruptcy in 2001 it unraveled to be one the biggest accounting scandals in United States history. There are many factors that contributed to Enron’s demise but their aggressive and unethical accounting practices were the key component. As a result‚ the accounting industry
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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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