Enron Question About the Movie

643 Words Apr 1st, 2014 3 Pages
1. Explain the concept and rationale behind mark to market accounting and it’s significance to Enron.
When the President of Enron, Kenneth Lay, hires new CEO Jeffrey Skilling, a very energetic and a “dreamer” who joins Enron on the condition that they utilize mark-to-market accounting, allowing the company to book potential profits on certain projects immediately after the deals are signed. To keep its stock price going up par example Enron began a venture that might make $50 million 10 years from now, it could claim the $50 million as current income. However, this projects turn out to be successful. This gives Enron the ability to subjectively give the appearance of being a profitable company even if it isn't.


2. Describe the Enron
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What did Enron buy and sell? Electricity? Natural gas? The corporation created a market in energy, gambled in it and manipulated it. It moved on into other futures markets, even seriously considering "trading weather." At one point, we learn, its gambling traders lost the entire company in bad trades, and covered their losses by hiding the news and producing phony profit reports that drove the share price even higher. Enron was a corporation devoted to maintaining a high share price at any cost. How Wall Street and the bankers wanted to investigate if they are the first to get profit from all that.

6. In the Stanley Milgram experiment, why were 50% of the suspects willing to shock to the death? In what way does the Milgram's experiment help to explain the behavior of the Enron traders?
The Milgram experiment was conducted to see how long an individual could take an order before they question that order. To see the evil people. With this idea the Enron traders pursuit their own profit to retire before to have 30 years old. Enron employees were constantly told to break laws or perform acts that could be considered immoral.

7. What is your opinion of the movie? Did you learn anything new about the Enron scandal? I liked the movie. I was not so aware what exactly happen to Enron. I always thoughts that was a big company that went to bankruptcy for bad…

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