reached a crescendo in the aftermath of the Enron bankruptcy. “Where were the auditors?” This question has been much asked since Enron, with almost no warning, sought bankruptcy protection a mere four weeks after its announcement of the need to restate its financial statements. The follow-up question: “How could this happen to a company that had received an unqualified auditor’s opinion on its historical financial statements for so many years?” The Enron and WorldCom scandals have alerted the financial
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Reporting Practices and Ethics Krystal Jackson Septemnber 10, 2012 HCS/405 Diana Schilling Large companies need the attention of investors, creditors, and banks to continue to be profitable. The information that these entities receive is product of the generally accepted accounting principles (GAAP) that are practiced by companies to create and release their annual finances. The financial statements allow the outside entities to judge the economic health
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a corporation that did this was Enron. Enron Corporation was an American energy company that was based in Houston, Texas. It was one of the world’s leaders in electricity, natural gas, pulp and paper, and communications. Enron reported financial conditions were sustained by systematic and planned accounting fraud. There were several reports that involved irregular accounting procedures which bordered on fraud. These reports were between Enron and their accounting firm, Arthur
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Economic Consequence Consideration ATG 563 - Advanced Accounting Theory February 14,2012 Should economic consequences be considered by the FASB in the accounting standard setting process? Yes, the FASB should consider economic consequences in the accounting standard setting process. Ever since the creation of the FASB in 1973, it was charged with establishing standards of financial accounting and reporting in the most efficient and complete manner possible. The goal of the FASB is to maintain
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corporate governance and restore investor confidence. It was sponsored by US Senator Paul Sarbanes and US Representative Michael Oxley. The act was passed in response to a number of major corporate and accounting scandals, the most popular being Enron, in the United States (audit-is.com/legislation/sox.htm, 2011). As a result of Enron’s scandal and public bankruptcy, congress passed the act which required all public companies that have business in the United States to have an accounting framework
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Running Head: ENRON CORPORATION Enron Corporation July 20, 2011 Based in Houston, Texas, Enron Corporation was an American energy, commodities and service company. Enron was formed in 1985 by Kenneth Lay after merging Houston Natural Gas and InterNorth. Enron employed approximately 22,000 employees and was one of the world’s leading electricity, natural gas communications, and pulp and paper companies before its demise in late 2001. For six consecutive years, Fortune named Enron "America's
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Running head: Enron Annual Analysis Analysis of Enron Principles of Management Abstract Enron Creditors Recovery Corporation was an American energy company based in Houston, Texas. Before its bankruptcy in late 2001, Enron employed around 21,000 people (McLean & Elkind, 2003) and was one of the world's leading electricity, natural gas, pulp and paper, and communications companies, with claimed revenues of $111 billion in 2000. Fortune named Enron "America's Most Innovative Company" for six
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(CBS) The stock markets got another king-sized jolt Tuesday as WorldCom revealed what could turn out to be one of the biggest accounting scandals in U.S. history. The telecommunications company said it had fired Chief Financial Officer Scott Sullivan, and accepted the resignation of senior vice president and controller David Myers, after an internal audit found improper accounting of more than $3.8 billion in expenses over five quarters. The misstated billions are also very bad news for ordinary
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Enron and Arthur Andersen Accounting Scandal The Enron accounting scandal resulted in a loss of reputation to Arthur Andersen which was a result of fraudulent financial statement reporting. Crimes discovered included irregular accounting procedures which could be turned in as fraud which involved Enron and Arthur Andersen as its accounting firm. They were found to have committed wire fraud, security fraud, making false statements to banks, creating several “independent” companies, called “Special-Purpose
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Assignment #6 10. Create your own “financial shenanigan” and explain how it might work. Do not use the shenanigans described by Schilit. A “financial shenanigan” is the act or practice of buying and selling securities on a portfolio immediately before a report is due in order to make the portfolio look more profitable than it has been. For example, as the industrial sector portfolio manager of Fordham’s Student Managed Investment Fund I will sell stocks that have performed poorly (i.e.
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