Enron Case

1893 Words Jun 7th, 2012 8 Pages
ENRON CASE

Please read the Enron cases posted on blackboard and the one in your book then answer the following questions based upon the case and Chapter 9. Make sure that your answers are supported by the facts of the case and the concepts you learned from Chapter 5. Please rely only on the case/chapter 9 to answer the questions except for question # 12—requires outside search.

Make sure your answers are sufficiently brief, concise, and relevant to the question. Please avoid general, round, and long statements based upon speculations. “Briefly explain” means an explanation requiring 2-5 sentence elaboration of the topic in hand.

This is an independent and individual project that should be done by each individual
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e. Government figures. Lay had closed personal ties with the Bush family. Enron’s efforts influence policy making.

2. Looking at all the evidence, what do you believe were the 3 major internal causes of Enron’s collapse? Explain each briefly. a. They were hiding huge derivative losses that would have stopped its growth much sooner. b. The company manipulated their revenue figures they used many methods to make the company conditions look better than what they really were by starting different accounting practices. c. They broke the legal and ethical integrity of the company by overseeing the company’s financial reports. What do you believe were the 2 main external causes of Enron’s collapse? Explain each briefly. a. Enron used false and deceptive methods to creatively hide its dealings which lead to losses of investors and creditor trust. b. Losses were held off the book by subsidiary companies, while assets were started. Publicly traded corporations are require to make their financial statements public but Enron’s finances were an impenetrable maze of carefully crafted imaginary transactions between itself and its subsidiaries.

3. Insider trading occurs when a person uses confidential (“inside”) information about a company to buy or sell the company’s stock for a gain. What evidence can you find in the case of insider trading? The former head of Enron Delainey new…

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