Enron Case Studies Samples For Students

When the Huston Astros made a stadium naming deal with Enron the future looked bright. Enron was a company which was making a lot of dividends and a major player in the American economy. Association with such a company is prestigious and highly lucrative for any sports outfit. Enron however collapsed and filled the biggest bankruptcy in American history. This soiled the reputation of the Huston Astros that had affiliations with the company. To add insult to injury the reputation of Enron took a nose dive due to the manner in which the company collapsed. It was associated with insider trading and corruption. This further ...

Madoff

Madoff was an American who was found guilty of fraud. He was in charge of a Ponzi scheme in the United States. The scheme is known to be one of the biggest financial fraud that ever happened in the United States of America. Madoff through his firm, Madoff Investment Securities, which bypassed other firms through making orders directly over the counter by making use of its retail brokers.
Those that assisted him in the fraud crimes included his close relations who he employed at his firm, Madoff Investment securities. He employed his brother and two sons as well as ...

Introduction

My name is Seung Joon and I am going to take you through the introduction and the conclusion parts of the Enron Accounting Scandal. This scandal has been used as a case study by many students taking Finance, Law and Ethics because of its relevance and implications to accounting principles and ethics. It is often cited in business debates as one worst corporate scandal in America. The introduction highlights the background of the company and the scandal while the conclusion provides the summary of the key points in the presentation. The body shall be presented by Max, Minho and Kevin. ...

Current Situation

The situation presents the unethical practices by Enron’s Chief Financial Officer, Andy Fastow during a period of massive violations of ethical and accounting practices. Fastow started Special Purpose Entities (SPEs) such as LJM which unethically grew and boomed out of Enron’s shares and assets (Arbogast). There was a serious conflict of interest since Fastow owned a big share of LJM. Before I joined, Global Finance as lawyer in the Tax Department, I had heard of LJM being a special purpose vehicle to purchase assets from Enron. I obtained a memo addressed to Enron’s executives in which Fastow sought exemption from Enron’ ...

Enron

Executive Summary
Introduction
Accounting and Finance are two important things from the standpoint of an organization and both of these concepts found exceptionally wonderful as far as operating an organization is concerned (Warren, p.119). Organizations usually have number of departments under one roof and every department is held responsible to play its part for the economic prosperity of the company. Accounting is the name of recording and interpreting the day to day transaction of an organization, while finance is the name of utilizing the funds of a company at an appropriate place from where the likelihood of earning ...

Writer’s intent

Seven years when the very fact, the story of the meteoric rise and future fall of the Enron Corporation continues to capture the imagination of the final public. What very happened with Enron? Outside of these related to the company world, either through business or education, comparatively few folks appear to possess an entire sense of the myriad folks, places, Associate in nursing events creating up the sixteen years of Enron’s existence as a yank energy company.
Some argue Enron’s best bankruptcy and ultimate death was the results of an absence of moral company behavior attributed, additional ...

1. Introduction
The Enron collapse, occurred in October 2001, consequently caused the bankruptcy of the whole Enron Corporation, the world’s leading energy, commodities and services company, as well as the dissolution of Arthur Andersen, which was one of the top five largest audit and accountancy firms in the world. Noteworthy it was not only the largest bankruptcy proceeding in American history at that time, but also the most serious audit failure, so that one says, “Enron is fraud and fraud is Enron”. The rise of Enron was almost as fast as its failure. Actually, it was an ...

Enron Corporation, a company founded in 1985 and grew rapidly, gained wide media coverage as it hit a share price of $US90.75 in 2000. The company spread its business to various sectors over its short course of growth. The growth was attributed to its former CEOs Kenneth Lay and Jaffrey Skilling. However, the real picture was different, for Skilling and his team through their unethical accounting practices had been cheating Enron’s investors. They kept the firm’s huge debt hidden with intent to maintain the reputation of the company. Skilling and his colleagues verbally attacked the industry analysts ...

Powers Report: The Enron scandal

The Enron scandal that occurred in 2001 has been cited as the biggest audit failure. The scandal would later lead to the bankruptcy and collapse of Enron Corporation. Enron was an American energy company that was based in Houston. It was the largest energy company in the United States. The scandal also led to the dissolution of Arthur Andersen, an accounting firm that was one among the largest five accounting firms in the world. The investigation began when the share price of the company declined sharply from $ 90.75 in the mid of 2000 to less than $1 in 2001 ( ...

Andrew Fastow, Enron’s Chief Financial Officer (CFO), devised two limited partnerships in 1999 – the LJM Cayman, LP (LJM1) and LJM Co-Investment LP (LJM2). The underlying purpose for this scheme was to buy back the stocks and stakes of Enron that were performing badly and in this way improve the appearance of the company’s financial statements. These partnerships were formulated exclusively to operate as independent equity investors intended for the special purpose entities that were being exploited by Enron (Bratton 31). Special purpose entities (SPEs) were utilized by Enron to finance and deal with risks related with particular ...

Introduction

In his case, Ferrell (2012) discusses Enron Corporation from when it was formed, when it collapsed and all that followed after its collapse. Enron Corporation is an American company headquartered in Houston, Texas. This company was formed in the year 1985 through the merging of two gas pipeline companies. Enron Corporation deals in products and services such as natural gas, and also electric power generation and distribution. However, in the year 2001 when Ken Lay was the Chief executive officer and at his time of his stepping down, Enron was faced with financial problems which eventually led to its ...

Company and Situation

In the period following the late 1990s, Thomas (2002) mentions that Enron Company was regarded as one of the outstanding, as well as, most innovative companies in the American state. The entity continued with its bid of building new power plants and operating other gas lines. It was also well-known for its unique methods of trading. However, all these prospects came tumbling down when it admitted to having misrepresented its incomes and that the company’s value of equity was less than the one stated in the balance sheet. In this light, the following paper will conduct research regarding ...

The fall of Enron

What went wrong and why?
Answer. The wrong done in the case of Enron and the reason for the wrong can be described on the basis of the following aspects of their business:
Enron’s core business was initially focused on natural gas pipeline and they made exceptional growth in the business. By the end of the 1990s they decided to diversify their business to the newly emerging business of asset management, construction, and Internet operations.
Enron entered into foreign markets of Latin America, Asia, and UK with fresh subsidiaries focusing on development of asset management, construction, and internet ...

Alexander (2007) tells us that duty ethics, or deontology, is a normative theory regarding what people should do, rather than what they should be. Hence, duty ethics is chiefly concerned with actions people take, rather than the consequences stemming from those actions. Deontology, in broad strokes, posits that if an action is right in principle, then there is no moral obligation forbidding that action – it need not be avoided, regardless of consequences.
Deontological theories are best understood in contrast to their consequentialist counterparts (Alexander, 2007). Consequentialism dictates that actions or intentions ought to be judged by the state of ...

Introduction

The growth and demise of the Enron Corporation has received critical responses from across the globe. A company that claimed revenues of approximately $101 billion in 2000 had fallen from its grace a year later in 2001, when it declared bankruptcy. The rise and fall of the Enron Corporation came as shock to a lot of small and large investors. After scrutinizing the financial statements investigators found that the figures in the financial statements were artificially inflated in a systematic manner, which is now better known as the “Enron Scandal”. This scandal is believed to be the biggest Accounting scandal of all ...

What where the Arthur Anderson employees and managers supposed to do and what did they do instead?

Arthur and Anderson employees and managers being stakeholders of the AA auditing company were supposed to exercise professionalism by practicing independence as required by the accounting profession. In addition, they were supposed to be independent from Enron Company to which was their client as international standard on auditing and internal. For example they were not supposed to be part of Enron’s employees and should not have taken part in the internal audit of the company. Besides they were supposed to give a true view of Enron’s financial statements as per there knowledge and skills in accounting and auditing.
...

Background

Enron case study dwells upon one of the most known scandals in business ethics and financial world. Founded in 1985 as a result of the merger between Houston Natural Gas and Internorth, Enron Corporation starts trading natural gas commodities in 1989. Throughout the 90s,the company was considered one of the most innovative and attractive for investment companies in the country. Renown for its unique business model and trading businesses, the company benefitted from a positive image, shareholder trust and external financing (Li, 2010). With a number of changes in leadership from Jeffrey Skilling to Kenneth Lay, who occupied ...

Life never prepared me in my past life for what I found in my first week, in global finance. Being a lawyer I had been in Enron for the past four years working with the tax department. In October 2000, Andy Fastow summoned me and asked me to be the general counsel for global finance. This opportunity was enticing since it was a good place to be in thus I accepted the offer.

Current situation

The first thing that I found in the new files was a deal between Enron and a company called LJM which was a special purpose company. I knew something ...

Corporate Social Responsibilities and Ethics

The concept of (CSRs) means that companies, organizations and/or societies have both societal and ethical responsibilities stretching beyond their existing economic responsibilities (Tuan, 2012). It requires these organizations to elaborate how they understand their responsibilities in efforts to including other stakeholders like customers, employees, local communities, customers, state governments, suppliers, international organizations among others. CSR stresses the need for organizations to behave like good corporate members of the society or citizens, by not only complying with laws and policies but also conducting their activities in ways protect the environment and other resources. Ethics may be seen as the fundamental ...

1) The word "corrupt" refers to a person’s act(s) of being dishonest and engaging in practices such as lack of integrity, crookedness, and bribery ("Definition of CORRUPT", 2016). It also refers to the destruction of integrity thus causing an individual to be dishonest and disloyal. In the case of Arthur Anderson, the prosecution noted that the accounting firm dishonestly encouraged Enron employees to exercise routine destruction of documents knowing that the government’s investigations into the acts of the accounting firm were imminent. The deliberate intention of the destruction and hence wrongdoing of Anderson was meant to ...

Question I – Explain the strategic management process and how a corporation is likely to use this process to achieve strategic competitiveness to earn above average returns.
Strategic management is the counterpart of the scientific problem process in the field of science. It grossly involves the identification of a problem, the gathering of information, and formulation of a hypothesis and a solution, and it usually ends with implementation and evaluation. The typical problem solving process shares a lot of similarities with the strategic management process yet the two cannot be the same. In general, the strategic management process involves four ...

Enron’s Case Study

Enron was one of the world’s biggest manufacturers of natural gas, oil, and electricity. Before 2002, it was considered one of the most profitable limited companies whose shares value rose from $19.10 in 1999 to $90.80 at the end of 2000 financial year. These successes is attributed to the board of directors and the top management team who always look for new ventures, partnerships, and make crucial decisions of the company. On several occasions, the company’s Chief Financial Officer, Andrew Fastow had many investments for the company and the board of directors never questioned his decisions, little ...

Introduction

People have always adhered to compliance with rules, regulations and standards that govern everyday living. Most people are aware that there are universal codes of ethics and morals that guide in decision making, as well as in the assuming the expected conduct of behavior. Ethics, most especially, is crucial in business. As asserted by Pitts & Kamery (2003), “ethics are important to firms for a variety of reasons: including the legal responsibilities of the executives, costs of violations, and reputation” (p, 79). Likewise, organizations that design ethical codes of conduct were proven to be more successful and last longer (Wadhwa, 2009; Worcester, ...

Arthur Andersen founded Arthur Andersen LLP (AA) in 1913. AA was built upon legendary integrity. On one occasion, Arthur refused to approve a transaction that could have inflated the earnings of a local railroad company. In 1954, AA started offering consultancy services that soon overtook audit services as the main revenue source. The culture of AA started changing from one where integrity and reputation came first, and instead AA focused on an aggressive pursuit of revenues. As the pressure for profits mounted, AA adopted more rationalized Audit approaches that required more analysis and less time input.
AA started having ...

Investor Communication Plan

Investor Communication Plan

Background

Western States Electric Components Group, a subsidiary of Consolidated Electrical Company, mistakenly misrepresented its sales income for the past four years. Western has been selling about 55% of its connolator generators to various ConsoE’s divisions at lower internal retail prices. The different divisions resold these connolators acquired from Western to outside companies. Unfortunately, the financial department has been recording these activities as two separate earnings, hence double booking. Upon the revision of the accounts for the four years, profits for the following financial year will come out as big loses hence affecting the prices and ...

Management Leadership

1. What is framing? Name 2 leaders who have utilized it effectively in casting a vision.
Many a time leaders forget to communicate to the team members the goal of an initiative in a clear and compelling way. Framing is the competency of the leader to make others understand the outcome of a situation or project so that the entire team can take effective action. For example, Jack Welch was able to communicate the business goals of its leadership as well as other stakeholders properly and it resulted in a huge success of GE during his tenure as the CEO. Mahatma Gandhi was ...

Question One: Why Nations fail - so close yet so different

Different nations from around the world are endowed with different resources, which they harness to build their economies. These resources influence not only their economies but also the political significance of the state. More fundamentally, they affect the culture and values of governance that characterize public finance and governance. It is vital that corporate finance should be administered in tandem with democratic principles of governance. Unfortunately, corporate governance has been stained with vices such as nepotism, corruption, official lethargy and incompetence. Governance in economic and political institutions is directly correlated with the level of democratic maturity of a nation. Furthermore, ...

Kinney National Services, Inc. was established in 1966 as a result of the merger between Kinney Parking Company and National Cleaning Company as a media and entertainment company. As at the time of its formation, the company had Steve Ross as its head. In 1967, Kinney National Services, Inc. expanded its operations through the acquisition of National Periodical Publications (quite often known as the DC Comics), Ashley-Famous (the talent agency of Hollywood) as well as the Panavision. In 1972, Kinney National Company was reincorporated as Warner Communications, with Steve Ross as the organization’s chief executive officer. Charles A. Agemian, the ...

The major things that IT managers will have to do differently when Sarbanes-Oxley becomes fully implemented and effective

On 30th day of July 2002, The Sabarnes -Oxley Act of 2002 whose intention is to give protection to investors through enhancement of accuracy and dependability of company revelation made pursuant to the laws of security together with other related purposes was applied as a reaction to the scandal that occurred of Enron and Arthur Andersen. The corporation offered glaringly fiscal statements that didn’t demonstrate the right returns in its statement of income and balance sheets. Enron was not alone; there were many other corporations that had the same outcome. The minimum prerequisite of this act is that an ...