awarded /100 /100 T213 U22712 Assignment September 2013 QUESTION (TASK 1 weighting factor: 40% of total CW marks) Enron: What Caused the Ethical Collapse? Kenneth Lay, former chairman and chief executive officer (CEO) of Enron Corp., in an introductory statement to the revised Enron Code of Ethics issued in July 2000, wrote: “As officers and employees of Enron Corp., its subsidiaries, and its affiliated companies, we are responsible for conducting the business affairs of the companies
Words: 2725 - Pages: 11
reports of a company, but a huge sigh of relief for those that had the most to lose at the hands of fraud and illegal activity. Sarbanes-Oxley wasn’t something set into motion for little reason. The emerging scandals of huge corporations such as Enron, Tyco, ImClone, WorldCom, and others in the early years of the 21st century prompted Congress to pass the much needed reform (Bumgardner, 2003). It was something that could have prevented the decline of the stock market, at least at that time, had
Words: 1053 - Pages: 5
Baluyot, Krishia Mae E. BSAV-2A Scandals that Rocked the Accounting World ❖ Enron Scandal The Enron Corporation led to bankruptcy Last October 2001. It is an American energy company based in Huston, Texas, and the termination of Arthur Andersen, which was one of the biggest audit and accountancy partnerships in the world. Enron is also attributed as the biggest audit failure. Enron was founded in 1985 by Kenneth Lay after merging Houston Natural Gas and Inter North several years
Words: 1782 - Pages: 8
What role did the CFO play in creating the problems that led to Enron’s financial problems? In order to prevent the losses from appearing on its financial statements, Enron used questionable accounting practices. To misrepresent its true financial condition, Andrew Fastow, the Enron’s CFO, takes his role involving unconsolidated partnerships and “special purpose entities”, which would later become known as the LJM partnership. Taking advantage from the SPEs’s main purpose, which provided the companies
Words: 2137 - Pages: 9
Enron: Smartest Guys in the Room Introduction: Enron’s Culture of Greed Enron is considered the most infamous and notorious corporate scandal of the twenty first century, many consider it the worst in the history of the United States (U.S.). The looting of Enron by its executives, the fraud, cover-ups, greed and arrogance precipitated its fall. Shareholders, including many Enron employees, trusting the leadership, filled their 401K portfolios with Enron stock losing
Words: 1186 - Pages: 5
bstract Enron became one of the largest natural gas and energy trading companies in the world. During the 90's Enron was considered as an innovative company within the global business market. Enron was known for its unique innovative technologies and distinctive approach to trading in the world of e-commerce. On December 2, 2001, Enron announced the biggest bankruptcy in history and when many people hear the word, Enron they associate it with the one of the most important accounting scandals in
Words: 315 - Pages: 2
Situation analysis Important internal controls that were ignored? The auditors of Enron did fail in their task of providing a duty of care to all of the parties. The main reason for this is that they failed to correctly audit the assets and financial position of Enron resulting in all stakeholders having no clue about the forthcoming collapse of Enron. This resulted in the stakeholders facing a very critical condition or a phase where in they were not sure if they would be able to recover their
Words: 1151 - Pages: 5
Enron Enron was founded in 1985 through the merger of Houston Natural Gas and Internorth, a natural gas company based in Omaha, Nebraska, and quickly became the major energy and petrochemical commodities trader under the leadership of its chairman Kenneth Lay. In 1999, Enron moved its operations online, boasting the largest online trading exchange as one of the key market makers in natural gas, electricity, crude oil, petrochemicals and plastics. Enron diversified into coal, shipping, steel
Words: 506 - Pages: 3
condition? For external auditors, the failures could be largely attributed to the lack of independence between external auditors and Enron and the existence of conflicts of interest. From 1993, Enron started to outsource its internal audit functions to Anderson. Besides, conflicts of interest gets aggravated when the cross-selling of consulting services by auditors increases a lot. And consulting fees to auditors are much lucrative than the audit fees. As a result, Enron could easily threaten Anderson to
Words: 509 - Pages: 3
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
Words: 3476 - Pages: 14
