ENRON Ethical Breach - Research Paper Example

Only on StudentShare

Extract of sample
ENRON Ethical Breach

Its stocks continued to increase at a modest rate, but in 1999 – 2000, investors saw a sudden 87% increase in 2000, which coupled with the company being named the most innovating company in America, meant the future prospects for the shareholders seemed excellent. Unfortunately, it was revealed in October 2001 that this almost sudden increase in investors’ confidence was due to accounting loopholes and fraudulent auditing, which allowed the company’s shares and returns to be appearing more favorable than they actually were. This ethical breach included the involvement and dissolution of Arthur Andersen, one of the most famous auditing firms of the world at the time. There is no reason to believe that Enron participated in corrupt practices since its inception in 1985, rather, evidence indicates that the ethical breach that lasted about a decade began several years later, when Jeffrey Skilling was hired and a team of executives was developed to cater to the accounting needs of the company. ...
Download paper

Summary

Running Head: Enron Ethical Breach Enron Ethical Breach Enron Ethical Breach Enron Corporation was a Houston-based American energy and services company established by Kenneth Lay in 1985. The company, which was believed to be the “most innovative company” of the United States and one of the world’s leading electricity, natural gas, communications, pulp and paper company, was formed by merging Houston Natural Gas and InterNorth…
Author : macejkovicedna

Related Essays

Sarbanes-Oxley and Enron
The accounting profession is self-regulated and its practitioners are supposed to follow the generally accepted accounting principles (GAAP). The GAAP framework was created in 1973 by the Financial Accounting Standard Board (FASB). In order for accounting to function properly the practice requires compliance of high ethical standards. Back at the beginning of the 21st century there was an avalanche of accounting scandals with the most notorious one being the Enron case. At the time investor confidence went down a lot as the credibility of the accounting profession came into question. In order...
7 pages (1757 words) Research Paper
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) Assignment
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...
6 pages (1506 words) Essay
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) Essay
Review of Accounting Ethis: Assignment
4. Analyze the accounts impacted and / or accounting guidelines violated and the resulting impact to the business operation. 5. As a CFO, recommend which measures could have been taken to prevent this ethical breach and how each measure should be implemented in the future. 6. 6. Use at least four (4) quality academic resources in this assignment. Note: Wikipedia and other Websites do not quality as academic resources Introduction The principles of business ethics help companies to increase their positive outcome, while lessening the ill impacts of their business activities on the general...
5 pages (1255 words) Assignment
Earnings Management: The Continuum from Legitimacy to Fraud.
Trochim & Donnelly (2008) would help us to identify and work with these two basic concepts of our research. Other studies by Schram (2006), Shank (2006) and Patton (2002) consider the process of identification and further interpretation of the key concepts of the study, i. e. "fraud" and "legitimacy". First of all, let us think about the meaning and the essence of the concept of "fraud". There is no doubt that this concept is often considered beyond the economic discourse. Nevertheless, when accounting practices are on the way, it is possible to restore in our memories a concept of fraud too....
3 pages (753 words) Research Paper
Got a tricky question? Receive an answer from students like you! Try us!