The Enron Scandal

More than a decade ago, one of the most commanding corporations in modern American history filed for bankruptcy. Enron, a seemingly invulnerable company would eventually provoke sweeping changes in regulation that controls the management and accounting of public companies even to this day. The Enron scandal has come to be known as one of the prime audit failures of all time and serves as a classic example of corporate greed and corruption. However, for the generation that watched in horror as corporations such as Enron fell along with the stock market, this scandal is slowly becoming just that: history. And for the newer generation of college students like me, it is almost ancient history. Despite the time that separates us from this scandal, it has never been more important to remember the lessons learned and best understand how the adoption of The Clarkson Principles can guide our careers in the business sector.

In my opinion the Enron scandal was one of the worst in American history. While we could argue many facets of the scandal the main talking point in my mind stems from the sheer level of corruption they managed to obtain. Which begs the question how far would the corruption have went had it not been for an insider blowing the whistle? It is estimated that Enron hid approximately 51.2 billion dollars worth of debt. They achieved this by utilizing several ingenious but unethical and illegal methods. However, the key to this scandal was the key involvement by the company which was supposed to be the watchdog. This is one of the major reasons SOX was created by the federal

Enron is viewed by many as the quintessential corrupt corporate juggernaut. Corporations are nothing more than a collection of people. If a corporation is corrupt than it must be filled with corrupt employs, and led by a front office devoid of moral standards, right? Perhaps this is not entirely true. Certainly an element of corruption was present in the case of Enron, the number of corrupt employees may not have been as encompassing as presumed. When asked to rate their level of honesty, most would respond that they are honest. In actuality, most people are not completely honest, and their level of dishonesty is correlated with their ability to rationalize the dishonesty and preserve their self- image as an honest and admirable person

Enron scandal spiralled out of controlled by actions perpetuated by the indirect knowledge or direct actions of Lay, Jeffrey Skilling, Andrew Fastow, and other executives. Also, the inability for this action to be detected by gatekeepers, which includes Auditors, Credit rating companies, Financial Analysts, can also be attributed to their collapse. Also, the involvement of banks and the press who awarded numerous awards amongst which is most innovative company and described them a “new business model”. Further, Enron six million dollars contribution to Federal politician candidates and parties cannot be ignored in this scandal. Although no concrete prove can be attested to bribery, it is my opinion that politician had a

In the three excerpts that will be discussed in this report there is a theme. That theme is ethics or the lack there of. What all three of these cases have in common is that people were willing to trade in their reputations, their livelihood and in some cases their personal freedom to get what they wanted. In two of the examples, the prize they sought was money, pure and simply a case of greed. Importantly, these people already had significant wealth, and they were willing to take the chance on losing what they had already attained to get more. In the other case, the defendant’s ethics are what initiated his behavior.

As per various researches, it has been proved that today variety of issues are prevailing in our society and all of them should be properly catered so that no further issues can be raised and this will, in the end, helps in reshaping the entire structure of our society too. Therefore proper measures should be taken from the very start so that no negativity can be raised and this will eventually help in enhancing the efficiency of our society too. The ethical code of conduct is linked directly with the research ethics and this is the major arena that should be highlighted positively in our society in order to enhance potential outcomes. In an organization, it is important to see how work is done by keeping in mind the ethical code of conduct and how it is affecting the society. In the majority of the fields, information security is not directly linked with the security and ethics and this is the reason how it is leading towards various alarming issues too. Therefore it is important to see how to enhance the effectiveness of various products. This paper will focus on ethics and how Eron faced issues due to lack of ethical strategies (Conroy & Emerson 2006).

The purpose of this article is analyze the downfall of the Enron Corporation and how the collapse of Enron Corporation consequence affected the United states financial market. Enron Corporation was the seventh largest company in the United States, and had the biggest audit failure. In this Research paper, it describes the reason of Enron Corporation collapse, including details of the internal/ external management, accounting fraud, and conflict of interest. Enron is the largest bankruptcy in America history!

History. Many scandals occur even without outsiders knowing anything that had occurred. Companies try their best to keep many of the accounting scandals quiet. Everyday, there are political and business fraud happening, and most of it goes unnoticed. No company wants to admit that there was a problem or that people within the company are not trust worthy. However, when executives in large corporations take scandal to the extreme, there is no way of keeping out of the spot light. Unfortunately, scandals are the tip of the iceberg. They represent visible failures and companies could really go down for such

Moreover, we know that ENRON has been buying a big number of ventures that looked promising. We know that ENRON has also been creating off balance sheet entities in order to remove the risk of their financial statements.  Because of market-based accounting explained above, ENRON recorded all time high revenues. The company thus wanted to be involved in other areas. For instance, ENRON was buying or developing an asset – such as a pipeline – and then was expanding through a vertical integration (buying a retail business around that pipeline). This strategy required huge amounts of initial investments and was not going to generate earning or cash flow in the short term. If ENRON elected to present this strategy on its financial statements, it would have placed a big burden on the company’s ratios and credit ratings, and credit ratings investment grade was crucial for ENRON energy trading business. In order to find a solution to this issue, ENRON decided to look for outside investors who would like to make those deals with

Enron, a company which originated in Huston, Texas, was one of the largest American energy trading corporations in the nation. Although it was one of the most well known companies, it was also one that crashed and burned the fastest, shocking many people when it did. Not only did it end fast, the company caused quite a scandal which is still being discussed and reviewed in today’s world. Enron’s bankruptcy scandal was so widely known because of the many people who associated themselves with the company and worked with it. When it finally did end in 2001 the corporation was a wreck. This paper will analyze the business of Enron, the impact which Enron had on the economy, the causes of the rise and fall, the effects of de-regulation, and an analysis of the collapse of Enron. Also in this essay will be a look at the accounting practices of Enron, who Arthur Anderson was, and what his role was in Enron. The essay will finally take a look at just what happened to Arthur Anderson after the collapse of the company to which he hurt.

With the complex system where there were wide ranges of product which include physical assets, it had reached the limits of accounting. The company had taken fully advantage of this to make balance sheet become a perfect picture of company’s performance. They used mark-to-market method of accounting, which state that “once a long-term contract was signed, the present value of the stream of future inflows under the contract was recognized as revenues and the present value of the expected cost of fulfilling the contract were expensed”. (Pauls, 2003) Therefore, the future profit had been account even the real cash flow had not come to the company yet.

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.

Ethics in the business world can often times become a second priority behind the gaining of profits and success as a company. This is the controversial issue that led to the Enron scandal and ultimately the fall of this company. Enron Corporation was an energy company, and in the peaks of their success, they were the top supplier of natural gas and electricity throughout America. Enron Corporation came about from a merger between Houston Natural Gas and InterNorth. Houston Natural Gas was a gas providing company formed in Houston during the 1920’s. InterNorth was a company formed in Nebraska during the 1930’s and owned one of America’s largest pipeline networks. In 1985, Sam Segnar, the CEO of InterNorth bought out Houston Natural Gas for $2.4 billion. A year later in 1986, Segnar retired and was replaced by Kenneth Lay, who renamed the company and created Enron. Enron was the owner of the second largest pipeline in America that measured over 36,000 miles. The company was also the creator of the “Gas Bank”, which was a new way to trade and market natural gas and served as an intermediary between buyers and sellers. As the company continued to develop, it became more of a trader rather than a producer of gas. This trading extended into coal, steel, water and many other areas. One of Enron’s largest successes was their creation of a website called, “Enron Online” in 1999, which quickly became one of the top trading cites in the world. By the year 2000 Enron as a company was

Most of the world has heard of Enron, the American, mega-energy company that “cooked their books” ( ) and cost their investors billions of dollars in lost earnings and retirement funds. While much of the controversy surrounding the Enron scandal focused on the losses of investors, unethical practices of executives and questionable accounting tactics, there were many others within close proximity to the turmoil. It begs the question- who was really at fault and what has been done to prevent it from happening again?

This report will analyse the groupthink’s concerns in the collapse of Enron. The collapse of Enron is less than three months, which Enron from a very prosperous company to a bankrupt enterprise. The collapse of Enron is one of the most grievous business failures in United States. This disastrous business failure had causes a large number of employees lost their jobs and retirement savings. Groupthink leads groups to make faulty judgments.