employees in order to maximize on profits. This shows the extent management was willing to sacrifice to fulfill the company’s appetite for money placing their staffs’ interests in the backseat. 3. What role did Lehman’s executives play in the company’s collapse? Were they being responsible and ethical? Discuss. The Lehman management openly violated the ethics code of business. For example they filed unverifiable, inaccurate financial reports openly contravening the Sarbanes-Oxley Act that states that
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Case Study: Enron Background Once the seventh largest company in America, Enron was formed in 1985 when InterNorth acquired Houston Natural Gas. The company branched into many non-energy-related fields over the next several years, including such areas as Internet bandwidth, risk management, and weather derivatives (a type of weather insurance for seasonal businesses). Although their core business remained in the transmission and distribution of power, their phenomenal growth was occurring through
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1 Erik Seigle Law 2150 11/24/15 Ethics Reflection Enron was a company that reached dramatic heights, only to see itself crumple from within through lies and deceit. Enron created a corporate culture that thrived on competition and was often seen as arrogant. The story of Enron ends with one of the largest bankruptcies in american history. The collapse of Enron affected the lives of thousands of employees, pension funds, and ultimately shook wall street to its core. Many p
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The Enron Fraud Enron Corporation was a conventional energy company founded in 1985, but soon expanded its operations as an energy trader of derivatives contracts, taking advantage of the deregulation of the energy markets. It also built and operated a variety of assets across the globe, including pipelines, electricity plants, pulp and paper plants, water plants, and broadband services; and provided financial and risk management services to customers worldwide. Enron soon became a world-renowned
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CASE STUDY #1 | The Function of Accounting Information Systems in the Enron and Bernard Madoff Fraud Cases | | | | | | | What is the definition of accounting information system? The Core Concepts of Accounting Information Systems textbook defines accounting information system “as a collection of data and processing procedures that creates needed information for its users” (Bagranoff, 2010). A key factor in determining the success in an organization is its accounting information
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ENRON: The Idiocy and the Irony Introduction Red flags were blinding as Enron learned about possible corruption with Enron Oil Trading in Valhalla, New York. After the merger between HNG and InterNorth, the Valhalla office, originally established by InterNorth seemed all but forgotten until quarterly and annual reports were due. Supervisors Tom Harding and Steve Sulentic were rarely on-site, preferring the comfort of offices in Houston. Louis Borget who established and operated the trading
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Fraud is a serious problem for most businesses today and often technology compounds the problem. In addition, the role of the independent auditor in the detection of fraud is often questioned. (http://www.swlearning.com/accounting/hall/ais_4e/study_notes/ch03.pdf) Fraud is dishonest activity causing actual or potential financial loss to any person or entity including theft of money or other property by employees or persons and where deception is used at the time, immediately before or immediately
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executives confessing to engage in price gouging, tax dodges, accounting shams, employee rip-offs, and other shady unacceptable acts are coming to light daily. Unethical and illegal practices are documented from the RJR Nabisco scandals in 1988 to today’s Enron, WorldCom, Merrill Lynch, Arthur Anderson, Xerox, and endless other corporations. The world realizes now that corporate greed is not about one-bad company, but large companies in general that have adopted unacceptable guidelines for corporate behavior
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to a synthetic lease? Before entering into a synthetic lease, the corporate tenant should know the potential shortcomings of a synthetic lease as well as when and when not to use one. EBay - Enron Under a synthetic lease, a company designs a special purpose entity (SPE). The SPE exists exclusively to supply the parent company with an operating lease. Basically, it keeps debt off the parent company's books under existing accounting rules
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the The Amazing rise and Scandalous fall of the Enron Corporation. Enron Corporation was an American energy, commodities and service company based in Houston, Texas. Before its bankruptcy in December 2, 2001, Enron employed more than 20,000 employees and was one of world’s major electricity, natural gas, communications and pulp and paper company with claimed revenues of nearly $111 Billion during the year 2000. In 1985 Kenneth Lay (the founder of Enron Corporation) merged the natural gas pipeline companies
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