accounting principles were not being followed and hid the fact that Enron’s policies and internal controls were not good enough to protect its shareholders. 3. The prime motivation behind the decisions of Arthur Andersen’s audit partners on the Enron‚ WorldCom‚ Waste Management‚ and Sunbeam audits was not public interest‚ as it should have been‚ but how much of a profit could be made. Examples that reveal this motivation include the fact that the CEO only ever reported profit as a measure of success
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November 19‚ 2010 Members: AC 516 8:30-10:30 Alfie Mae Mañaul Sir Sevilla John Vershir Lumacang Agapito Yang The Rise and Fall of Enron As one of the world’s leading electricity‚ natural gas‚ communications and pulp and paper companies with claimed revenues of nearly $101 billion in the year 2000‚ Enron should have not ignored the importance of transparency which gives assurance. Transparency is defined as the quality or state of being understood and candid. Every
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" Sociology 25. Harvard University. 20 Feb. 2008. Chandra‚ Gyan. "The Enron Implosion and Its Lessons." Journal of Management Research 3 (2003): 106-110. Hamilton‚ Stewart. The Enron Collapse. International Institute for Management Development. Lausanne: IMD‚ 2003. Pettigrew‚ Andrew M. "On Studying Organizational Cultures." Administrative Science Quarterly 24 (1979): 570-581. Sims‚ Ronald R.‚ and Johannes Brinkmann. "Enron Ethics (or: Culture Matters More Than Codes)." Journal of Business Ethics
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Evidence based management uses best scientific evidence available to help in decision making (Thomas & Pring 2004). Air Canada adopted this management approach and employed the use of emotional intelligence‚ EI‚ during their selection process to identify pilots with high EI. An intensive research in social science reveals EI as a key determinant of success in individuals and the organisations they serve (Diana Durek & Shawna Sheldon 2009). Accordingly‚ Air Canada has relied on this valuable piece
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The particular causes of Enron ’s failure are complex. There are lots of issues that have to do with the Enron collapse. Enron is a company that was called as Houston Natural Gas and then Enteron. It becomes politically connected player in the new deregulated market of energy. At one time Enron appears to have been a successful and innovative enterprise‚ principally engaged in trading and dealing in energy-related contracts. At some point it expanded by making substantial investments in a variety
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1.1 Aspects of Andersen’s culture that would be signals of a dysfunctional culture. Inability to question superior’s practices and incapability to suggest new ways of doing things in all areas of the firm. Andersen’s organization‚ culture and practices were derived from the old structure‚ which were still seen as the best practices even if outdated. At the organization‚ new trends of the market and new competitors were not going to change any of the company. "Don’t question it. That’s the
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that was being used by Enron for off-balance sheet financing that misleading the public that Enron is doing well. These fraud generated by creating false profits‚ hide losses‚ keep financing off Enron’s consolidated financial statements. Instead of giving a proper advise and addressed these issuers to Enron‚ Arthur Anderson allowed Enron to continue to manipulate their numbers and mislead the stakeholders. As an advisor‚ Arthur Andersen doesn’t have the desire to confront Enron board in order not to
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Unethical Practices of Arthur Andersen - Week 2 - CheckPoint: 1. What did Arthur Andersen contribute to the Enron Disaster? Arthur Andersen contributed a lot to the Enron Disaster. Arthur Andersen approved the structure of man Special Purpose Entities (SPE) that were used to generate false profits‚ hide losses‚ and to keep financing off Enron’s consolidated financial statements. Also‚ AA failed to abide by the Generally Accepted Accounting Principle (GAAP). In addition‚ AA did not
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When Enron filed for bankruptcy protection on December 2‚ 2001‚ the financial world was shocked. How could this high profile leader in the world of energy trading have failed? Based in Houston‚ Texas‚ Enron was the seventh largest company by revenues in the United States‚ employing 25‚000 people worldwide. Its performance had been lauded in the media‚ and business school cases had held it up as a glowing example of the transformation of a conservative energy company into a global player. It had frequently
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is the case with the Enron Corporation‚ a once massive energy company that suffered arguably the most horrific financial collapse in American history. The Enron failure began with the development of a flawed corporate (organizational) culture‚ and was fulfilled by the constant reinforcement of that culture. From the top down‚ Enron ’s corporate culture damned the company ’s successes and ensured it for eventual collapse. It must by noted that while the collapse of the Enron Corporation was dynamic
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