What Were the Consequences of the Enron Scandal - Case Study Example

Only on StudentShare

Extract of sample
What Were the Consequences of the Enron Scandal

This case study represents a bold attempt to answer the question stated in the work's title: What Were the Consequences of the Enron Scandal?
Enron, “a provider of products and services related to natural gas, electricity and communications to wholesale and retail costumers” represented one of the largest fraud scandals in history. As a result of the fraud investigations, the company was forced to file for bankruptcy in December 2001. While the bankruptcy of a small company is taken as a routine, Enron’s case is different as the company was ranked seventh by Fortune 500.
During the 1990s, Enron expended quickly into several areas such as developing a power plant and a pipeline. This expansion, however, required large initial capital investments and long gestation period. By that time, Enron already raised a lot of debt funds from the market and hence any other attempt to raise funds would affect Enron’s credit rating. But Enron had to maintain the credit ranking at investment rate in order to continue business. On top of that, the company wasn’t making enough profits either, as it promised to investors. Hence, Enron began making partnerships and other special “arrangements” (Special Purpose Entity, or SPE). These companies were used to keep Enron’s debts and losses away from its balance sheets, therefore allowing it have a good credit rating and look good in front of the investors. ...Show more

Summary

The paper discusses the Enron scandal and its immediate consequences as well as the new legislation issued as a result of several fraud scandals: Sarbanes-Oxley Act. Enron Corp. is known as one of the largest scandals in U.S. history…
Author : bjohns
What Were the Consequences of the Enron Scandal essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the case study on your topic
"What Were the Consequences of the Enron Scandal"
with a personal 20% discount.
Grab the best paper

Related Essays

Questions and Answers
Management is partly to be blamed for not being transparent about the true picture of the company and its operations. Since the stock prices were rising, the Board did not monitor the executives’ actions. The Board is at fault for permitting the suspension of Enron's own code of conduct to permit the conflicts of interest inherent in the off-books corporations.
2 pages (500 words) Case Study
Enron Corporation
The company used several mechanisms to cook up the books including market to market accounting and by hiding debt using off balance sheet transactions. The organization had a culture of greed and deception. The top executives of the company prior to the demise of the company violated the SEC insider trading bylaws by selling over $600 million in stocks.
6 pages (1500 words) Case Study
Corporate Social Responsibility and the Law
It was involved in malpractices that are prohibited in its transactions. The corporations collapsed due to fraud and corruption. It had employed more than 20,000 people by the year 2000 (Kerns, 2005). By then, there were very good strategies that were applied in accounting and this made it to be ranked among the top ten largest companies in the United States.
6 pages (1500 words) Case Study
Financial Reporting on Enron
The major point here is that it was the offence that was a prime example of criminal activity and corruption in the corporate world. Here we will, analyze the case mostly from the financial accounting purpose. Enron was found in 1985 from a merger of Houston Natural Gas and Internorth, Enron started of with the first nationwide natural gas pipeline network.
18 pages (4500 words) Case Study
Fannie Mae Accounting Scandal
In the year 2004, it was found out by the federal government authorities that Fannie Mae has been involved in some unethical accounting practices since the past 6 years (i.e. since 1998), and this called on for an extensive investigation for the same. This investigation lasted almost 3 years and its report was released lately by the concerned department.
5 pages (1250 words) Case Study
Enron Case Study
This research paper is an attempt to trace the roots of Enron, its executives, the steps they took to reach to the top, what exactly went wrong, and how this wrong was further fueled by an individual's personal quest for gains, eventually turning the company into nothing more than a mere sand dune.
11 pages (2750 words) Case Study
Case project
The paper also looks at ethical implications of such practices in business and the significance of law in order to counter such practices. The paper will also attempt to establish the impact of cases involving fraud and measures that can
6 pages (1500 words) Case Study
Accounting of Enron
Moreover David had a duty towards the stockholders of Enron whereby he had the role of a whistle-blower in case of any uncertainties in the firm’s financial records. Considering that he
2 pages (500 words) Case Study
Business Ethics - The Enron Scandal universal ethics point of view-
The Enron scandal made it known that corporate fraud and corruption had gained ground in the business setting (Collins, 2006). Addressing Enron’s situation can take a number of alternatives, all of which
2 pages (500 words) Case Study
The Enron case
However all these were before its bankruptcy on December 2, 2001. Enron shares traded at $85 initially and after the fraud was discovered it plummeted to $0.30 in the sell-off immediately the fraud was exposed (Armour and McCahery, 38). The fraud
6 pages (1500 words) Case Study
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT