Got a tricky question? Receive an answer from students like you! Try us!

The Case of Enron and Arthur Andersen - Essay Example

Masters
Essay
Finance & Accounting
Pages 6 (1506 words)
Download 1

Summary

The Case of Enron and Arthur Andersen Name: Course name: Course instructor: Date: Introduction From a moral standpoint, the massive greed, lack of ethics and collusion among the auditors, company officials, legal counsel engaged, investment firms and bankers of Enron, the greatest losers were shareholders, creditors and employees of the company…

Extract of sample
The Case of Enron and Arthur Andersen

The greed that was evident did not benefit any one party at all. When the company shares lost ground in trading, the Securities and Exchange Commission (SEC), the Texas State Board of Public Accountancy and the US congress were on hand to instigate reforms that had the aim of ensuring that occurrences like those at Enron could not occur again. Arthur Andersen, the auditor at Enron, could be said to have received what it deserved in terms of being forced out of the market place due to bankruptcy. Additionally, the audit firm became a template of negative audit firms. The US federal government crafted regulatory legislation that is being taken up by other countries to prevent such occurrences in the future. For example, Mexico adopted those regulations in 2006 popularly referred to as the Sarbanes-Oxley Act. Discussion Enron as a corporate entity was not guilty of any major crimes that were blatantly obvious. On the most part, the company was indicted for misleading the outside forces charged with consulting for it and also misrepresented its financial situation1. These misrepresentations and falsehoods cannot entirely be considered as crimes. On the contrary, fraud can be considered as a crime but the very act of proving a criminal intent to defraud is very difficult. ...
Download paper
Not exactly what you need?

Related Essays

Making Sure Enron Does Not Happen Again: The Sarbanes-Oxley Act of 2002
The collapse of the corporate giant brought about a startling reality to the world of business: the corporate giant (and their auditors) had lied. As a direct result of the collapse of Enron and the subsequent meltdown of its auditing firm Arthur Andersen, the Sarbanes-Oxley Act was proposed. It quickly became apparent to all as soon as the scandal became public that both it and the cause behind it could have been avoided. To try to prevent other corporate scandals and collapses from happening, President George W. Bush signed into law the Sarbanes-Oxley Act, named for its sponsors, which would…
14 pages (3514 words)
Describe and consider the lessons for auditors and regulators from Enron fraud
It seems that even a well structured audit programme may fail to provide desired outcomes unless the whole audit team pays special attention to each and every phase of the audit process. The past decade witnessed a series of corporate scandals including Lernout & Hauspie, Arthur Anderson, Enron, WorldCom, Parmalat, Peregrine Systems, Rite Aid, and Homestore.com. Subsequent investigations have proven that majority of those failures were attributable to accounting fraud. However, these incidents greatly increased the significance of audit work and firms nowadays allot more money for developing…
12 pages (3012 words)
What Companies Can Learn From The Enron Case and The Impact of the Enron Case?
The corporation was formed with the merger between two natural gas pipeline corporations, namely Houstan Natural Gas and Internorth Inc. After the merger, the position and corporate image of Enron Corporation improved by a large extent thereby enhancing its productivity and profitability among others in the market of the US. In the year 1989, Enron Corporation became one of the largest gas suppliers of the United States and United Kingdom (UK) with approximately sixty thousand kilometers of gas pipelines (American-Business, 2011). The prime objective of Enron Corporation was to position itself…
10 pages (2510 words)
Fraud Case with Enron
q=cache:gxCBEAYU1csJ:scholar.goo). 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…
3 pages (753 words)
Enron Scandal Case study
Basically those businesses prosper that have implemented systems to enhance the faith of the shareholders via transparency, responsibility and fairness (Raghavan, 2010). Carrying out of ethical business conduct would mean accepting and practicing sound corporate governance. The role of auditors is also vital in bringing good corporate governance (Fan & Wong, 2001). The main objective of the study is to identify the facts that led Enron to financial scandal and brought up to the surface a culture of corruption as well as greed. The role of the auditors and the corporate governance in such…
5 pages (1255 words)
Case Study: Ethical Behavior in Accounting and Financial Management
All these debts were covered by shareholders through affiliation with other companies, deceptive accounting and illicit loans. The major reasons behind the company’s bankruptcy can be associated with Enron’s management. Contextually, those who were responsible for managing the activities of the company had involved in transferring Enron’s fund to their personal accounts and made fake balance sheets to depict a rosy picture of the company’s financial health. The people involved in such unethical activities were none other than the company’s executives and auditors. The collapse of…
4 pages (1004 words)