Essay on Overview of the Enron Scandal - 1217 Words

Enron Corporation was an energy company founded in Omaha, Nebraska. The corporation chose Houston, Texas to home its headquarters and staffed about 20,000 people. It was one of the largest natural gas and electricity providers in the United States, and even the world. In the 1990’s, Enron was widely considered a highly innovative, financially booming company, with shares trading at about $90 at their highest points. Little did the public know, the success of the company was a gigantic lie, and possibly the largest example of white-collar crime in the history of business. The roots of the lies start with former Enron CEO Kenneth Lay. This man helped bring together a number of smaller energy companies, namely InterNorth International and†¦show more content†¦All these factors lead to figures that were less than what Ken Lay promised, and even started posting losses by the second quarter of 1997. These less than stellar numbers did not discourage company executives, and Enron continued to spend foolishly on advertisement and lobbying for deregulation. All of the prior represents the business side of the downfall of Enron. That being said, businesses fail all of the time. The reason why Enron Corporation and its executives will always live in infamy is not because the company failed, but how and why the company failed. How, exactly, does a company worth about $70 million collapse in less than a month? It became clear that the company not only had financial problems, but ethical problems that started from the top of the company and trickled down. A key player in these problems was Jeffrey Skilling. He was a man brought to the company by Ken Lay himself. Skilling brought his own accounting concept to the company. It was called mark-to-market accounting. This concept allowed Enron to record potential profits the day a deal was signed. This meant that the company could report whatever they â€Å"thought† profits from the deal were going to be an d count the number towards actual profits, even if no money actually came in. Mark-to-market accounting granted Enron the power to report major profits to the public, even if they were little or even negative. It became a major wayShow MoreRelatedEnron Scandal Of Enron Corporation Essay1145 Words   |  5 PagesIntroduction Enron scandal which aroused in 2001 was one of the most famous events in the area of fraud audit. As the auditor company of Enron, Arthur Andersen failed to prepare true and fair auditing reports. They both suffered lethal loss at that time. 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This would be achieved by discussing aboutRead MoreBusiness Failure Paper1045 Words   |  5 Pagesthe largest energy companies in the world, Enron Corporation. I will discuss the leadership, management, and organizational structure of the company and how this failure could have been prevented. Company Overview Enron Corporation was an American energy company in downtown Houston, Texas. Enron employed more than 22,000 workers and was one of the largest companies dealing with electricity, natural gas, and communications. In the year 2000, Enron claimed revenues of over $100 billion. ByRead MoreAuditor’s Role: The Importance to Overcome Ethical Dilemmas Essay example1030 Words   |  5 PagesThroughout the years, the news covered stories of corporate scandals involving accounting unethical practices. These unethical corporate acts had a tremendous negative impact on these company’s stockholders, investors, employees and the whole U.S. economy. 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