The Expose of the Former Top Accountant of Enron Corporation after Its Bankruptcy - Case Study Example

Ex- ENRON Accountant Says He Cooked Books Prosecution Witness Could Detail Whether Ex-CEOs Knew Of Alleged Fraud http msnbc.msn.com/id/11588297/ With the desire of going beyond the expectation of Wall Street by Enron's former Chief Executive Jeffrey Skilling, the former top accountant of Enron Corporation, trading division, became a witness in line with the raided reserves to boost earnings of the company in the mid of 2000. Mr. Wesley H. Cowell gave evidence with regards to the manipulating of reserves.

Figures were given to illustrate how much was deducted from reserves and added to income to show higher earnings- per- share and make the company appear to be financially healthy. Mr. Cowell admitted to Prosecutor Sean Berkowitz that he illegally manipulated the reported income of the company. Lay and Skilling stated that there is no fraudulent activities in the company after they were being contend by the prosecutor, regarding their knowledge of illegal accounting scheme to support the unstable condition of the company, months before it landed to bankruptcy.

Further, Mr. Cowell testified for the half million dollars he paid to the Securities and Exchange Commission in order to resolve civil accusation pertaining to the illegal accounting of the company's income. According to the Securities and Exchange Commission, Mr. Cowell was also involved in other plans such as increasing the book value of one oil and gas company to appear that target quarterly earning was being achieved, and the hiding of million of dollars losses through the company's trading activities.

Similarly, beyond expected trading profits were set aside, to be reported in the coming quarters and give the company an image of success. In view of the above article, the following questions may be raised, how much confidence do investors need to place in their trusted business How can they ensure that company reports like balance sheet reflects the true financial condition of the business, and not one of those balance cheat Financial scandals, breach of integrity and system deregulations are not new in the business world, however they can be avoided.

Every involved professional should fight their way through fraud free services and break from any dispute of interest. The ENRON Corporation should have considered the strengthening of its business image to be its primary investment, as this would entail to building of solid confidence by investors that can further lead to a fair and truthful business for all. Imposition of bigger liability to business professionals should be given additional effort and consider change if necessary in order to end the journey to deregulation, and avoid the compromise of fairness, clearness, and integrity in the profession.

Professional organizations on the other hand should partake in the development of their practice and ensure that adherence to established standards are being strictly observed to avoid occurrence of such problems. REFERENCES Nussbaum, B. BusinessWeek Online. (2002 January 28) Can You Trust Anybody Anymore The Scope of the Enron Debacle Undermines The Credibility Of Modern Business Culture. Let's Get Back To Basics, 1. Retrieved March 12, 2006 from http://www.

businessweek.com/magazine/content/02_04/b3767701.htm Msnbc.com. Ex- ENRON Accountant Says He Cooked Books Prosecution Witness Could Detail Whether Ex-CEOs Knew Of Alleged Fraud, 1. Retrieved March 12, 2006, from http://msnbc.msn.com/id/11588297/