0412100 CASE #1 : ENRON’S FALL 1. State the facts of the case. Enron is the Seventh- largest company in the united states but after six months‚ Enron filed for bankruptcy‚ the outcome of what has been called the greatest accounting fraud of the 20th century. Twelve thousand employees lost not only their jobs but their entire retirement and life savings‚ which had been invested in Enron Stocks. Other owners of Enron’s stocks—including thousands of ordinary Americans whose pension were
Premium Enron
them. Usually people get tired of being reminded of these rules as some of them seem like basic curtesy or something anyone with decent parent was taught during youth‚ but that attitude is what lead to one of America’s biggest financial scandal‚ Enron. Enron is a perfect case of what happens if you ignore the ethics of accounting and just do anything for profit. This scandal is full of examples of disobeying the basic ethical standards set up by the American Institute of CPAs or better known as the
Premium Ethics Financial statements Enron
Companies such as Enron‚ Exxon‚ Ford‚ Union Carbide and Johnson & Johnson have all had occasions where unethical practices have reared their ugly heads and each chose to handle things differently‚ with varying degrees of consequence. Each of these company ’s bout with unethical behavior will be examined. In July of 1985 Houston Natural Gas merged with Inter North to form Enron‚ originally Natural Gas Pipeline Company. In 1989 Enron began trading natural gas commodities. In June 1994 Enron traded its
Premium Ethics Business ethics Enron
1. What did Arthur Anderson contribute to the Enron disaster? Arthur Andersen (AA) contributed to the Enron disaster when AA consulting became its own separate entity‚ named Accenture. Revenues from consulting services surpassed revenue from auditing services. A natural competitiveness grew between the two rivals and this is where the problems began to start. Management held maximinizing revenues as their primary focus of success and promotions/bonuses were based on this factor. The CEO of AA‚ Joe
Premium Enron Auditing Arthur Andersen
CASE#1 ENRON CORPORATION 1. Different parties were responsible for the occurrence of Enron crisis. Listed below are some of the parties who were responsible for the Enron fraud. a. The Enron Management: There is no doubt that the Enron management staged the fraud. The management was responsible for the misrepresentation of financial statement/ documents and wrong accounting practice. In Early 2002‚ their abusive accounting and financial reporting practices surfaced. Moreover‚ the management influenced
Premium Audit Enron Auditing
in the real auditing procedure. Bankers since they were supposed to be able to find the fraud in their clients’ financial statements when other parties traded those securities with Enron. 2. Anderson’s auditors provided these prohibit services to their public company client Enron: offering consulting service to Enron about their daily accounting decisions and operations which states as “bookkeeping or other services related to the accounting records or financial statements of the audit client” in
Premium Audit Internal control Enron
inappropriate accounting practices. Enron‚ WorldCom‚ Tyco‚ HealthSouth and Adelphia were selected for analysis because of the availability of information regarding specific events occured before‚ during and after the fraud period as well as the ethical issues involved . There is abundant literature presented on the Enron and WorldCom scandal. Tyco‚ Adelphia‚ and HealthSouth were selected to expand and support the information available in the WorldCom and Enron cases. Throughout the research process
Premium Enron Accounting scandals Fraud
5/9/2012 Angelia Hunter Impacts of Unethical Behavior The collapse of Enron in 2001 shed the light on a number of unethical business and accounting practices in the corporate world. In 1986 Enron CEO Kenneth Lay combined his Houston Natural Gas company with several other companies. At this time the company began growing exponentially. By the mid-1990’s the deregulation of the oil and gas industries allowed Enron to spend heavily and purchase companies as well as serving as a major supplier
Premium Kenneth Lay Enron Jeffrey Skilling
auditing for both public and privately held companies followed the AICPA ’s standards of the 10 generally accepted auditing standards. In the years 2000-2002‚ there had been an increased of major corporate accounting scandals. Large corporations such as Enron and WorldCom went into bankruptcy by trying to cover up their losses and debt. In response to the all the fraud‚ the US government passed the Sarbanes-Oxley Act. The Sarbanes-Oxley Act created the Public Company Accounting Oversight Board‚ or PCAOB
Premium Audit Enron Auditing
passed by Congress in response to the Enron and WorldCom financial scandals. The primary purpose of SOX is to protect shareholders from errors or fraudulent reporting by the company they have invested in. The Sarbanes-Oxley act is enforced by the Securities and Exchange Commission‚ a department dedicated to ensuring compliance to SOX from all firms‚ and is also responsible for revising provisions of the act in order to keep it current and up to date. The Enron financial scandal showed the public and
Premium Enron Accounting scandals