instilled in a company that is being considered to provide support is immense. There are key factors that a company looks for when choosing. These factors could include integrity, reliability, honesty, responsibility, and prestige just to name a few. Enron and Arthur Andersen auditors had such a partnership where Arthur Andersen auditors provided accounting support. There were unethical practices that lead to the collapse of both companies. Arthur Andersen Auditors Arthur Andersen the founder of
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A.1 Throughout this paper, the “Competition Bikes Inc. Storyline” case study will be used to prepare a summary report based on the evaluation of the company’s operations. The objective will be to evaluate the company’s operational strengths and weaknesses based on the following: a. Horizontal analysis results b. Vertical analysis results c. Trend analysis results d. Ratio analysis results As defined by Business Dictionary (2014) Horizontal Analysis is ” Comparative study of a balance sheet
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THE ENRON COLLAPSE The Androids Under Attack case was similar to the case of Enron Corporation. It was formed in 1985 from a merger of Houston Natural Gas and Internorth, Enron Corp. was the first nationwide natural gas pipeline network. Over time, the firm’s business focus shifted from the regulated transportation of natural gas to unregulated energy trading markets. The guiding principle seems to have been that there was more money to be made in buying and selling financial contracts linked to
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Business Ethics: Enron Case Study Introduction Enron was a very powerful company that was doing very well in the market. The value of its share was high and the company was enjoying an overall healthy position as a business. The employees were happy and new recruits would have killed to get a job at Enron. However, this was not to last. Enron enjoyed so much success that it got to its head and it started making all sorts of problems. Enron decided to change its organizational structure by employing
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Review the mandated requirements for legal compliance (from chapter 4) and determine which requirements apply to the Arthur Anderson case. There are five categories that separate the mandated requirements for legal compliance. Two directly apply to the Arthur Anderson case. Those requirements include (1) protection of consumers, and (2) incentives to encourage organizational compliance programs. When I read the text, the examples which were given were all about making sure that people were
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Enron: Opportunity for Corruption It could be argued that the majority of Enron employees knew that something was not right with the company. So much money was being made yet there was no solid evidence on how that money was being made. The Enron financial scandal that swept the nation was the primary result of a company with too much free will. The purpose of this paper is to show with evidence from the Enron case how no government regulation on companies can lead to humans making unethical
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caused the unethical actions to continue which in-turn can be said to have caused or at least aided in the downfall of the company. Human Resources also has the responsibility of making sure retirement funds are being handled appropriately. According to Sullivan (2004), “The most obvious error was the setting of retirement fund rules that restricted employees from selling holdings in Enron stock, while allowing senior management to sell large volumes of theirs”. This action in itself should have
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CASE STUDY – UNIT 1 1. Andrew Fastow is a key person responsible for the downfall of Enron. When he became the CFO in 1998, he came up with the plan to make the company appear in great shape by using the mark-to-market accounting practice. The company would build an asset, such as a power plant, and immediately claim the projected profit on its books, even though it hadn't made one dime from it. If the revenue from the power plant was less than the projected amount, instead of taking the loss, the
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Only months before Enron Corp.’s bankruptcy filing in December 2001, the firm was widely regarded as one of the most innovative, fastest growing, and best managed businesses in the United States. With the swift collapse, shareholders, including thousands of Enron workers who held company stock in their 401(k) retirement accounts, lost tens of billions of dollars. Investigations of wrongdoing may take years to conclude, but Enron’s failure already raises financial oversight issues with wider
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Arthur Andersen Collapse Introduction Arthur Andersen was one of the biggest top 5 accounting firms around the country, practicing globally. The firm ran into many ethical issues when becoming involved in the Enron scandal, which affected the company globally. The ethical perceptions across cultures affected the employment of many people that ended up losing their jobs or transferring to other firms. There were many risks and consequences involved in the demise of Arthur Andersen. All of the
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