Enron Scandal

2150 Words May 20th, 2013 9 Pages
Introduction I have described the ethical and governance issues of the Enron scandal that took place in 2001. In this paper, there is information about the way things went the way it did with the Enron scandal. They hide a lot of documents pertaining to how their profits increase so rapidly. It also includes the close link Kenneth Lay had with George Bush. The investigators had some help with what happened in the scandal of Enron.
Enron scandal at a glance
Enron had grew from nowhere to becoming Americas seventh largest company in just 15 years, employing 21,000 staff in more than 40 countries. They lied about their profits and were accused of a range of shady dealings, including concealing debts so they didn’t show up in the
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Bush. They gave U.S Attorney General John Ashcraft $57,499 in campaign cash for his failed 2000 Senate re-election bid in Missouri. Texas attorney general John Comyn also accepted $158,000 in campaign contributions from the company.
Lessons from the Enron Debacle: Corporate Culture Matters! Enron’s collapse has sent shockwaves all over the financial world raising serious questions about corporate governance. Arthur Andersen turned a blind eye as the money disappeared. As long as there where a set of off the books, unregulated private partnerships to take on debts, hide losses and kick off inflated revenues, the executives were able to keep bond rating agencies happy. Andrew Fastow took the most blame because he was working on both sides of every transaction manipulating Enron financial statements to enrich him and other service executives.
Creative Accounting used at Enron Creative accounting is a euphemism referring to accounting practices that may follow the letter of the rules of standard accounting practices but certainly deviate from the spirit of those rules. Enron took the idea of extending the market-to-market accounting over the short term of two or three years. By doing that their earnings were boosted and profits went up instead of going down in order for Enron to show ongoing growth to the public. Creative accounting made from Enron look really powerful on paper, but like the say “looks can

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