Free Essays on Enron

The article on Enron states that there was not one main reason why Enron fell; however it was a corporate culture of deception that lead to the demise of this company. Enron had many loans on their books that they disguised as assets to make them look stronger and more profitable. They worked backwards by figuring out what they wanted their company to look like financially, and then made changes in the books to make it appeal to them. Since the authorities were not using checks and balances to make sure fraud was not taking place, it would have been easy for Enron to make it look like particular divisions were doing worse then they actually were, so they did not have to pay their employees as much. It was also easy for Enron to lie to their accountants because they did not check what the managers told them was truth. The auditors did not check the accountant’s books for mistakes either. There were so many mistakes in so many different areas of this company that its hard t o pinpoint one thing. The article on the Sarbanes-Oxley Act summarizes the new legislation that has been put into place to help guard against another financial disaster, such as Enron and WorldCom. Under this law, attorneys are responsible to report any illegal acts to a board of directors. If the board of directors that the attorney reports to does not pass on this information to proper authority, they will be forced to resign. When the SAS 99 became effective, it profoundly changed the relationship between businesses and auditors because if the CPA does not follow the SAS 99 rules and it comes to the attention of the AICPA, they will lose their CPA and be prosecuted. The SAS 99 coupled with the Sarbanes-Oxley Act should do a great deal to safeguard against scandals in the business world.... Free Essays on Enron Free Essays on Enron The article on Enron states that there was not one main reason why Enron fell; however it was a corporate culture of deception that lead to the demise of this company. Enron had many loans on their books that they disguised as assets to make them look stronger and more profitable. They worked backwards by figuring out what they wanted their company to look like financially, and then made changes in the books to make it appeal to them. Since the authorities were not using checks and balances to make sure fraud was not taking place, it would have been easy for Enron to make it look like particular divisions were doing worse then they actually were, so they did not have to pay their employees as much. It was also easy for Enron to lie to their accountants because they did not check what the managers told them was truth. The auditors did not check the accountant’s books for mistakes either. There were so many mistakes in so many different areas of this company that its hard t o pinpoint one thing. The article on the Sarbanes-Oxley Act summarizes the new legislation that has been put into place to help guard against another financial disaster, such as Enron and WorldCom. Under this law, attorneys are responsible to report any illegal acts to a board of directors. If the board of directors that the attorney reports to does not pass on this information to proper authority, they will be forced to resign. When the SAS 99 became effective, it profoundly changed the relationship between businesses and auditors because if the CPA does not follow the SAS 99 rules and it comes to the attention of the AICPA, they will lose their CPA and be prosecuted. The SAS 99 coupled with the Sarbanes-Oxley Act should do a great deal to safeguard against scandals in the business world.... Free Essays on Enron Enron a Post Mortem - Enron was heralded as America’s most innovative company for five years by Fortune magazine. What happened? What lead to Enron’s demise? The collapse of Enron is one of the century ’ s most infamous, with reverberations being felt around the world. Craig Donaldson speaks with Enron ’ s interim CEO Stephen Cooper about his approach to people management in the midst of this most extraordinary of working circumstances Enron was one of America’s leading companies prior to its spectacular collapse in 2001. It was frequently named as one of America’s top 10 most admired corporations and best places to work, and its board was acclaimed one of the US’ best five, according to Fortune magazine. As America’s seventh largest company, Enron experienced explosive growth through the 1990s. It had revenues of US$139 ($184) billion, US$62 ($82) billion in assets and employed more than 30,000 people across 20 countries. While Enron was considered a phenomenon in its heyday, a highly decentralised decision-making and financial control structure made it virtually impossible to get a clear and coherent understanding of the corporation, according to interim CEO and chief restructuring officer, Stephen Cooper. â€Å"In the space of 30 days, Enron went from American icon to Chapter 11,† he says. The collapse brought an enormous amount of outrage from the company’s stakeholders, while the scale and complexity of Enron’s bankruptcy has resulted in 12 separate investigations by the US Congress.... Free Essays on Enron THE COLLAPSE OF ENRON In early, 2001, Enron Corporation was named most innovative company in America for the sixth year in a row by Fortune Magazine. Soon enough things had turned and by December 2001, Enron filed for bankruptcy. Enron was the premiere trading company of the world, listed as the world’s greatest energy company and now in 2001 suffered the worst business failure in U.S. history. The U. S. was devastated by this and it really hurt all of the employees within Enron. Thousands of employees lost their jobs, savings, 401 (K) retirements plans virtually overnight. One retiree was reported to have lost $1.3 billion in savings and shareholders investors lost nearly $70 billion in market value. No one had even the slightest clue that any of this was going to happen, just like that they were out of there jobs with no money. People with families and children had nothing anymore, it was a travesty. The employees who had invested so much of their stock and savings in Enron’s plans suffered the most form this sudden downfall. They had nothing left to show for all of the hard work that had put into the company for so many years. The were so strong a year earlier in 200, employees were up to 19,000 people they even made $100 billion in revenues a year. Their plan was simply â€Å"becoming the world’s greatest company† which was stated by the current CEO and CEO at Enron, Kenneth Lay. When Kenneth states this I don’t think he puts an ethical review on this, considering the fact that he let go of so many people’s jobs and all of their money. He would do anything to get this company to the top, even if it was cheating, stealing, manipulating people. He is a very greedy person and put himself before his employees and the rest of the company. From my point of view that is ridiculous but that’s the kind of people we have in our world today, as long as they are living a good life they aren’t worry about ot... Free Essays on Enron Kenneth Lay, the ex-CEO of Enron took a small natural gas company, and created a financial powerhouse. In just a little over 15 years, Enron grew into one of the US’s largest companies. It embraced new technologies, established new methods of trading in energy and seemed to be a shining example of successful corporate America. Kenneth Lay himself was awarded a place in the Texas Business Hall of Fame for his achievement of bringing the small company to where it stood. Many surveys showed Kenneth Lay as one of the top managers for the nation. His background of academic and government positions helped back his position as a dedicated leader. Disaster then struck the companies success was all smoke and mirrors created by artificially inflated profits, dubious accounting practices, and fraud. The company unraveled and came crashing down, resulting in thousands of people loosing their jobs and life savings that they invested in to the company. Enron was born in July of 1985 with a merger of Houston Natural and Omaha-based InterNorth. Kenneth Lay was elected as the chairman and chief executive of the company. Around the same time Washington began to lift the controls over who produced energy and how it was distributed. Kenneth Lay saw a chance to make the small company thrive and seized it. Enron guaranteed its customers stable prices during the energy regulation changes. The response to the stable energy prices that Enron was offering was huge. Everyone wanted future gas at the fixed prices of today. In a few years Enron was responsible for over one fourth of the gas business for the United States. Kenneth Lay then decided that it would be profitable to expand its business into other fields by trading other commodities such as coal and steel. Early in the year 2000 Enron was peaking its economic success and began to invest into broadband Internet networks seeing the dot.com economy expand with profits. The company boa... Free Essays on Enron Enron Corp. is one of the world's largest energy, commodities and services company. Before its Chapter 11 bankruptcy filing, it marketed electricity and natural gas, delivered energy and other physical commodities, and provided financial and risk management services to customers worldwide. Based in Houston, Texas, Enron was formed in July 1985 by the merger of Houston Natural Gas and InterNorth of Omaha, Nebraska. Initially a natural gas pipeline company, Enron rapidly evolved from delivering energy to brokering energy futures as energy markets were deregulated. The company began marketing electricity in 1994 and entered the European energy market in 1995. In 1999, Enron launched a plan to buy and sell access to high-speed Internet bandwidth, and it launched EnronOnline, a Web-based commodity trading site, making it an e-commerce company. The company reported revenues of $101 billion in 2000. It has stakes in nearly 30,000 miles of gas pipeline, owns or has access to a 15,000-mile fiber optic network, and has a stake in electricity generating operations around the world. Aftershocks in Europe Enron's collapse will hit many markets. Enron is the largest bankruptcy in United States history, and cost thousands of people their retirement and jobs. They used different accounting tricks to deceive their employees and the public on how good their financial situation really was. How could such a giant, thriving company go from worth around $60 billion dollars to bankruptcy in such a short period of time with no major warning signs? What could allow such a huge financial scandal to take place? How will the Enron scandal affect the current business world and the way that businesses are run in the future? These are all questions that are currently trying to be explained. The story of Enron is still constantly unwinding more and more everyday. The small Houston based company that was started in 1985 when Houston Natural Gas combi...