The Fall of Enron

Enron was firstly a natural gas pipeline company that combine as the combination of Nebraska and Omaha’s natural gas company, Houston Natural gas and InterNorth. It took 15 years from 1985 to 2000 to climb up into the one of the largest gas company in North America. Behind the successful of the company, it was a story of betrayal and

Enron was the country’s largest trader and marketer for electric and natural gas energy. Its core business was buying energy at a negotiated price and later, selling the energy when prices increased. As an energy broker, Enron provided a service by allowing producers to negotiate a certain price while Enron took the risk that prices would fall below what it bought energy. Buyers of energy also benefited because Enron could ensure the supply of energy. In 2000 Enron was listed number five on the Fortune 500. What happened to the company which was among the most admired for vision and quality thinking? Enron was the company that held virtual assets and not the real assets, such as power stations, which were capital

Whenever someone hears the word "Enron" today, they usually think of the transgressions committed by the top-level executives who successfully managed to destroy the company's reputation and achievements.

Even the small profits reported by Enron in 2000 were eventually determined to be only a illusion by court-appointed bankruptcy examiner Neal Batson. Batson’s report reveals that over 95% of the reported profits in these two years were attributed to Enron’s misuse of MTM and other accounting techniques. But while financial analysts could not be expected to know that the company illegally manipulated the earnings, the reported profit margins in 2000 were so low and were declining so steadily that they should have merited ample skepticism from analysts about the company’s profits.

Q1- Who were the key stakeholders involved in, or affected by the collapse of Enron? How and to what degree were they hurt or helped by the actions of Enron management?

After years of appearing to be growing financially, Enron was on top of the world. By the end of the 1990’s Enron was named Fortune’s, “100 Best Companies to Work for in America” and “America’s Most Innovative Company”, six years in a row. Little did the public

All of the prior represents the business side of the downfall of Enron. That being said, businesses fail all of the time. The reason why Enron Corporation and its executives will always live in infamy is not because the company failed, but how and why the company failed. How, exactly, does a company worth about $70 million collapse in less than a month? It became clear that the company not only had financial problems, but ethical problems that started from the top of the company and trickled down. A key player in these problems was Jeffrey Skilling. He was a man brought to the company by Ken Lay himself. Skilling brought his own accounting concept to the company. It was called mark-to-market accounting. This concept allowed Enron to record potential profits the day a deal was signed. This meant that the company could report whatever they “thought” profits from the deal were going to be and count the number towards actual profits, even if no money actually came in. Mark-to-market accounting granted Enron the power to report major profits to the public, even if they were little or even negative. It became a major way

The Enron Corporation started in 1985 by Kenneth Lay and was the result of a merger between Houston Natural Gas and InterNorth Corporation (Madsen & Vance, 2009). Enron had the biggest gas transmission system in the U.S which consisted of a network of 38,000 miles of pipeline (Giroux, 2008). After the addition of Jeffrey Skilling, Enron transformed itself from a producer and distributor of natural gas to a trading company (Chandra, 2003). Enron lobbied hard for deregulation and was capable of being able to trade almost anything (Chandra, 2003).This idea required vast amounts of liquidity (Chandra, 2003). Enron’s revenue began to increase at a rapid speed (Chandra, 2003). Skilling developed a workforce that enabled the concealing of billions of dollars through the use of special purpose entities, fraudulent financial reporting, and accounting inadequacies (Giroux, 2008). Enron committed fraud over an extended period of time to manipulate earnings in order to maintain compensation of central executives. Despite the collapse of Enron, many executives were paid millions of dollars while other Enron workers were terminated and lost all of their retirement funds (Giroux, 2008). Enron has went down in history as not only being the biggest bankruptcy in U.S. for that time period, but also the largest audit failure (Giroux, 2008).

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?

The Enron case is well known for being the largest corporate bankruptcy in American history. Thousands of people world-wide lost billions of dollars, lost life savings, and lost their jobs. Due to the vast corruption, greed and the blatant disregard for integrity from the very top of Enron leadership, world markets crumbled and investor confidence in corporate America was severely damaged (Chandra, 2003.)

Enron is known worldwide for being responsible for one of the largest corporate scandals in U.S History (History.com Staff). This once well-respected corporation rose as high as number seven on Fortune magazine’s list of the top 500 U.S. companies and employed over 21,000 people (History.com Staff). However, after failed attempts of hiding their large-scale corporate fraud, corruption, and scandalous activites, the corporation was forced to file for bankruptcy which ultimately led to the collapse of the entire corporation (Wall Street Club).

Enron was a major natural gas company, which was created in 1985. Enron was audited by the public accounting firm Arthur Andersen. It has not been confirmed when Enron began falsifying its records, but it is roughly around 1995 (Douglas O. Linder). Enron falsified its records by taking past assets and claiming them as current. This made the company 's financial records look very good with a large income coming into the company. These reports made Enron the fifth largest company in the Fortune 500. The report was shown to the public stock and shareholders. From this report many people would invest into Enron because of its large source of income. As people invested in the company it increased the company 's value. Enron then decided to use its employees 401(k)’s to its advantage and invest these 401(k)’s into the stock of Enron. Although the company 's records were in great shape, the company was losing lots of money to its ever increasing competition from the market. People got suspicious of how the company became so big. This is what began the

The story of Enron’s bankruptcy, an US company that provided products and services related to natural gas, electricity and communications has been one of the most serious cases of unethical practices in the American economy. The company directors in association with their accountants and lawyers created subsidiaries in order to generated false earnings, avoid taxes, inflated assets and hide losses. Finally in 2001 the company lost the credibility in the market and the scandal was exposed affecting thousands of employees and investors. (Tonge, Greer, & Lawton, 2003)

Enron failed largely due to the unethical practices of its executives (Johnson, 2003) Primary motivators is known to have been greed amongst managers and their subordinates, most of whom seemed to have been in a race to receive larger

The Enron case created a reevaluation of corporate governance and a revolution of accountability between corporation and shareholder. Many theorists believe that the Enron case showcases the