paper. This paper will take a look at financial fraud and the deterrents in place since 2002, and offer the opinion that the deterrents are not working. A history of the issues as they relate to this opinion will be given. Further, recommended solutions to the perceived problems will be put forth. It is worthy of mention that deterrence and prevention are treated as synonymous from this point forward. No effort will be made to distinguish a difference between the two concepts. Problem Statement
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Enron was a large energy company and was among the top ten largest companies in America before its downfall into bankruptcy. The failure of Author Andersen and Enron is still a puzzling, outside America. Auditing and accounting principles in the United States of America are considered strong and sophisticated. Transparency and disclosure are really emphasized in American companies, and because of this the downfall of Andersen and Enron still raises questions. This has
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ENRON COMPANY Foundation, History and Decline 1. Enron company 1.1 What is Enron 1.2 History and Organization 1.3 Main business units 1.4 Main characters 2. Enron scandal 2.1 The decline 2.2 Causes 2.3 Consequences of the scandal 2.4 Punishment 2.5 Enron's insurances 3. Enron reconstitution 3.1 Cleaning up after the fall 3.2 Restructuring Enron 3.3 The future (and present) of Enron 3.4 Preventive measures 1.1 What is Enron : Enron was one of the ten largest American
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likelihood of scandals. Enron, a leading energy and natural gas provider was accused of an accounting fraud in 2001. One of the primary reasons that led to this scandal was Enron’s usage of special purpose entities (SPEs) to cover up debt that the company was taking upon. By hiding additional debt, the company looked favourable as an investment because of low risk. Additionally, creditors were impressed with the low debt to equity ratio and were open to the idea of lending Enron money in case the need
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Sherron Watkins—Revelations of a Letter Who Is Sherron Watkins? Sherron Watkins gained fame as the so-called “whistle-blower” in the Enron accounting scandal. “Enron hid billions of dollars in debts and operating losses inside private partnerships and dizzyingly complex accousnting schemes that were intended to pump up the buzz about the company and support its inflated stock price.” Watkins wrote two letters, one anonymously, to Enron’s chairman, Kenneth Lay. In those letters she “exposed top
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RUNNING HEAD: EXCELLO TELECOMMUNICATIONS CASE Excello Telecommunications Case Kevin C ETH/376 February 10, 2014 Excello Telecommunications Case The year is quickly ending for Excello Telecommunications, and they are trying to maximize earnings for the company. With increased competition from foreign companies, Excello meeting its financial estimates are looking bleak. Failure to meet earnings expectations can reduce the availability of bonuses, stock options and could
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Nobody Won Michelle L Brown Oklahoma Wesleyan University Abstract When the Arthur Andersen LLP/Enron scandal surfaced in 2001, there was much confusion as to whom committed what crime and how many employees were actually involved. After the facts and criminal charges were final, the sequence of events makes sense; the union of two companies, the rise of the participating executives, and finally the end of the money ride. The leaders of both companies used dishonesty to make an abundant amount
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Enron Corporation (Former NYSE ticker symbol ENE) was an American energy company based in Houston, Texas. Before its bankruptcy in late 2001, Enron employed approximately 22,000staff and was one of the world's leading electricity, natural gas, communications and pulp and paper companies, with claimed revenues of nearly $101 billion in 2000. Fortune named Enron "America's Most Innovative Company" for six consecutive years. At the end of 2001 it was revealed that its reported financial condition
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correct solution for the problems that arose from the Enron and WorldCom bankruptcies. The article illustrates how the different rules and legislature affect different size business, and the ramifications that resulted for companies that must follow the Sarbanes-Oxley Act. The authors of the article also conducted a study on whether or not fraud of the financial statements was in direct correlation of businesses filing bankruptcy (Nogler & Inwon, 2011, p. 68) like in the cases of Enron and WorldCom
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people; they are smart, well-educated and ambitious. They often start as wide-eye fresh graduates at large corporations of which profit-driven culture infiltrates all levels within. Some of them were even chosen as CFOs of the year: Andrew Fastow (Enron) and Scott D. Sullivan (Worldcom). So why do they turn out to be the thieves stealing from the economy $2.5 trillion per year? Weinberg argues that these people, like Pavlo, do not just wake up one day and decide to commit in a greed-inspired fraud
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