MBA Program FN5202: Advanced Corporate Finance Report: Enron accounting fraud In October 2001 it was revealed that reported financial condition of Enron Corporation was sustained substantially by institutionalized‚ systematic‚ and creatively planned accounting fraud. Enron misrepresented its profits and was accused for a range of shady dealings‚ including concealing debts so they
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Professional Development Article: The CPA Journal Enron Ten Years Later: Lessons to Remember Acct 4501W- Auditing Concepts Professor Feller March 11‚ 2013 Summary In the article entitled Enron Ten Years Later: Lessons to Remember‚ the authors Anthony H. Catanach Jr. and J. Edward Ketz discuss the importance of learning from the mistakes made by the senior executives of Enron. The “off-balance sheet” that Andrew Fastow‚ the CFO of Enron‚ created to funnel tens of millions of dollars into
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Enron used multiple strategic partners to help cover up their accounting schemes. Houston law firm Vinson & Elkins’ top client was Enron. The law firm wrote opinion letters supporting the legality of the deals Enron was making even though they were illegal. Additionally‚ Arthur Andersen LLP was Enron’s auditor. More than 100 employees at Arthur Andersen were dedicated to Enron’s account. The firm was a major business partner of Enron and some Arthur Andersen executives accepted jobs with Enron. Some
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executive action no. 15 february 2002 The Enron Ethics Breakdown By Ronald E. Berenbeim It is perhaps the most compelling business ethics case in a generation—a textbook version of what can go wrong in an organization that lacks a true culture of ethical compliance. Investors and the media once considered Enron to be the company of the future‚ but as its demise suggests‚ it was in reality not a particularly modern business organization‚ especially in its approach to ethics. On the surface
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Lecturer: Mr. Montaser Tawalbeh Case Study Enron: Were They the Crookedest Guys in the Room? Case Summary Enron has become the classic case on business ethics. Enron formed after the merger of Internorth Incorporated and Houston Natural Gas in 1985. On January 1‚ 1987‚ as part of the merger agreement‚ Ken Lay became the new CEO. In 1990‚ Ken Lay hired Jeffrey Skilling from McKinsey and Company as the Head of Enron Finance. By 1995‚ Enron had become the largest independent natural gas company
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with Enron to help create a forward market in natural gas (wikipedia.org). Ken Lay hired Skilling in 1990 as chairman and chief executive officer of Enron Finance Corp. and in 1991 he became the Chairman of Enron Gas Services Co. Also‚ he was appointed CEO/managing director of Enron Capital & Trade Resources. Skilling was promoted to second highest position in the company‚ president and chief operating officer in 1979. By pushing an aggressive investment strategy‚ Skilling helped Enron to become
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over their head and food to eat. And third‚ investors were lied to and had things hidden from them. Both Enron and WorldCom were companies that had lied to investors. Enron told investors they had made $1.8 billion‚ when in reality it was quite the opposite: they told IRS they had lost a billion (p 210). WorldCom on the other hand‚ reported no loss but over exaggerated about their earnings. Enron also hid the fact that they were trading natural-gas and electricity derivatives. Employees were not
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Full Article In the public eye‚ Enron ’s mission was nothing more than the cover story for a massive fraud. --Bethany McLean and Peter Elkind CORPORATE FRAUD‚ BANKRUPTCIES‚ AND VARIOUS ILLEGAL ACTS HAVE always been part of the business environment. Every time fiascos erupt there is a shock‚ but business history records dozens of major failures‚ frauds‚ and other measures of massive corruption each decade. The big ones often hit during recessions or periods of other economic problems
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Is Enron Overpriced? More from Fortune FORTUNE 500 Current Issue Subscribe to Fortune It’s in a bunch of complex businesses. Its financial statements are nearly impenetrable. So why is Enron trading at such a huge multiple? By Bethany McLean March 5‚ 2001 NEW YORK (FORTUNE) -- In Hollywood parlance‚ the "It Girl" is someone who commands the spotlight at any given moment -- you know‚ like Jennifer Lopez or Kate Hudson. Wall Street is a far less glitzy place‚ but there’s still
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December 22‚ 1961) is an American businessman who served as the chief financial officer of Enron Corporation‚ an energy trading company based in Houston‚ Texas‚ until the U.S. Securities and Exchange Commission opened an investigation into his and the company’s conduct in 2001. Fastow was one of the key figures behind the complex web of off-balance-sheet special purpose entities (limited partnerships which Enron controlled) used to conceal their massive losses. Fastow served a six-year prison sentence
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