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Fraud Case with Enron - Assignment Example

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Fraud Case with Enron Enron was a very prosperous and prominent firm that was an American energy company established in Houston, Texas. Enron was formed in 1985 by Kenneth Lay after he had acquired two other gas companies in his quest to become a conglomerate in the American history. Nonetheless, after Enron’s biggest scandal, shareholders lost around $11 billion as the company continued on the downward spiral. Enron finally filed for bankruptcy at its $63.4 billion in assets were completely diluted. Many of the stockholders got measly pennies back for the huge investments they had in the company. Enron was charged with “cooking the books” along with their associates Arthur-Anderson. In essence, the company was running a Ponzi scheme. A Ponzi scheme is a strategy used by creditors to attract new investors in the company and utilize their funds to pay of old debts. Enron’s financial statements did not comply with the operations and finances with the shareholders and analysts (2002). The Enron Scandal and the Neglect of Management Integrity Capacity Moreover, the Enron management continued to implement unethical practices as they would modify the balance sheet in order to favor the revenue goals that the corporate wanted to achieve (2010). "Non-Media" Jury Prejudice and Rule 21(a). The continuous spiral of modifying the financial statements became a continuous habit and the lead cause of the downfall for the company. Undoubtedly, managers in corporate America have to protect the interests of the corporate executives along with the goals of the stakeholders. The management clearly neglected responsibility of overseeing the unethical practices that were plaguing the corporation. The Enron scandal continued to grow worse every year as it became a problem that was out of control (2010). "Non-Media" Jury Prejudice and Rule 21(a). The primary motivation for Enron was to keep their gross income high along with cash flow while diminishing their liabilities and long-term debts. The moral and legal framework that has been embedded in S The dynamic culture environment of Enron was clearly based on a money making scheme. Corporate employees were in constant pressure to reach their revenue goals that the firm came up with . In essence, Enron’s corporate culture can be best depicted through aggressive growth, risk taking, profit planning and commercial innovations. Although some may deem this as positive values, one cannot diminish the fact that a corporation must acknowledge and mitigate the risks (2006). Four Years After Enron. Since these values were not balanced and were never embedded in the principles of corporate integrity, the goal to reap high revenue became the core culture value for the organization. Since Enron ...Show more


Examples may be stolen company data, personal information, proprietary secrets, etc. State the article and source that you will be evaluating for the assignment.  > Discuss the nature of the fraud and the impact to the company as a result of the fraudulent activity.  > Discuss “management ”Its responsibility to the company stakeholders to protect and secure the company from fraudulent activity.  > Discuss the corporate environment and culture that may have contributed to the fraud.  > Discuss the impact to the company or brand as a result of the fraudulent activity.  > Discuss the measures that could have prevented and/or detected this fraud.  One of the biggest frauds that has ever…
Author : vgraham
Fraud Case with Enron
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