Enron Questionable Accounting History - 1364 Words

Enron: Questionable Accounting Leads to Collapse Enron, a provider of natural gas, electricity, and communications began when two large gas pipeline companies merged together in 1985. CEO Jeffrey Skilling, CFO Andrew Fastow, and Chairman Ken Lay worked diligently throughout the 1990s to build the company to be the largest most successful of its time. Having its name in Wall Street was becoming a norm for the company as it grew beyond all hopes and expectations. The company had become unstoppable as shares increased and partnerships became stronger. Believing so much in the company Business Ethics states, â€Å"Jeffrey Skilling went so far as to tell utility executives at a conference he was going to â€Å"eat their lunch† (Farrell, Fraedrich,†¦show more content†¦Business Insider states,† After his Enron retirement became worthless, Maddox and his wife Phyllis had to lease their suburban Houston home and move to an old family farmhouse in the East Texas town of Van. They also went back to work. Phyllis Maddox, a retired teacher, became a substitute teacher while her husband mowed lawns and pastures.† The reality that came soon after the company collapsed was not only felt by shareholders but by hardworking Americans as well. The loss of retirement funds set many individuals back and left them with literally nothing in return for so many prior years of hard work. Ways Enron’s bankers, auditors, and attorneys contributed to Enron’s demise. The Economist states, â€Å"In America, well-policed stock markets, fearsome regulators at the Securities and Exchange Commission (SEC), stern accounting standards in the form of generally accepted accounting principles (GAAP), and the perceived audit skills of the big five accounting firms, have long been seen as crucial to the biggest, most liquid and most admired capital markets in the world.† The controversial subject of who is to blame for Enron’s fraud able to stay hidden for such an extended amount of time is distributed among three top employees mentioned along with other close working individuals from other companies. The ways auditors, attorneys, and bankers contributed is by their lack of concern and ability to convince themselves the fraud was truly not happening among one ofShow MoreRelatedEnron And Its Impact On Corporate Business Practices1124 Words   |  5 PagesEnron Enron is a company infamous for one of the largest scandals in American corporate history. 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It begs the question- who was really at fault and what has been done to prevent it fromRead MoreEssay about Enron: Who was at fault?1664 Words   |  7 PagesMost of the world has heard of Enron, the American, mega-energy company that â€Å"cooked† their books (Gupta, Weirich Turner, 2013) and cost their investors billions of dollars in lost earnings and retirement funds. While much of the controversy surrounding the Enron scandal focused on the l osses of investors, unethical practices of executives and questionable accounting tactics, there were many others within close proximity to the turmoil. It begs the question- who was really at fault and what hasRead MoreThe Rise And Fall Of Enron1008 Words   |  5 PagesIntroduction Enron began as an energy company in 1985. After the deregulation of oil and gas in the U.S., Enron lost its’ exclusive rights to natural gas pipelines. The CEO, Kenneth Lay then hired a consulting firm to reinvent the company in order to make up lost profits. 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The company that was forced to declare bankruptcy and lay off many employees; also resulted in thousands of others losing a significant portion of their retirement funds that were invested in the company’s stock (Ferrell, Fraedrich, Ferrell, 2013). Additionally, the perceived scandal propagated concern of accounting practices of corporations and initiated new reporting practicesRead MoreOrganizational Culture, Management Philosophy And Ethics999 Words   |  4 Pagesorganization; from operations, marketing, and, accounting. No matter the size, industry or level of profitability of an organization, business ethics are one of the most important aspects of long-term success. According to Webster’s dictionary, ethics can be defined as the â€Å"rules of behavior based on ideas about what is morally good and bad† these rules influence every aspect of our societ y (Investopedia, N.D.) (Webster’s, N.D.). While sometimes overlooked, accounting plays a large role in many organizations