Case Study Of Enron, Worldcam, And Adelphia Communications
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This case study was about different accounting company's that were investigated and charged with making fraudulent documents and records with money. These different company's in this case study were Enron, WorldCam, and Adelphia Communications (Ferrell, 2009). Enron was founded by former CEO Kenneth Lay, former CEO Jeffrey Skilling and former CEO Andrew Fastow. Enron was one in several other major corporations (most famous) accused of dirty dealings (Ferrell, 2009). Enron had reported 111 billion in 2000. The Corporation collapsed in debt after it had been concealed through a complex scheme of off balanced sheet partnership called mark-to-market. Mark-to-market accounting is assets that are yet to be obtained based on the current market prices. Mark-to-market allowed Enron to record future profits on books as present and ignoring sources of debt boosting the company's revenue on paper (Ferrell, 2009). Enron Corporation was forced to file Chapter 7 bankruptcy and had to lay-off 4,000 employees and a thousand more lost their retirement savings that had been invested in Enron stock. Later former chief financial officer Andrew Fastow was sentenced to six years in prison in exchange for giving prosecutors important information (Ferrell, 2009). Jeffery Skilling was sentenced to 24 years in prison and was ordered to pay back 45 million in restitution for his part in the scandal. Kenneth Lay died before he could began serving his 20-30 year sentence in prison (Ferrell, 2009).