Enron Research Papers Samples For Students

Abstract

This report analyzes the case of Enron and its failure. The practices adopted by the management have been analyzed and criticized in order to identify the main cause behind the whole issue. Along with this, the report also suggests different solutions and recommendations for the management in order to minimize or stop the risk of such issues in the future. The report has also highlighted the importance of Information System in this case. Moreover, the report presents suggestions regarding how the implementation of Information System can help the management to avoid such issues.

Organizational analysis: Enron

Enron scandal is one of the ...

- Methods used by Enron to manipulate accounting figures
The fall of Enron was one of the highly publicised corporate failures. The directors of the company manipulated the financial statements of the company to mislead users of accounting information. The methods used by the firm included mark-to-market and off-balance sheet financing as well as interference with auditor independence.

Mark-to-market accounting

Enron changed its revenue recognition policy from the traditional revenue recognition principle to mark-to-market accounting. As an energy company, Enron’s incomes were derived from mainly the sale of natural gas. As a practice, Enron entered into several long-term contracts with ...

Introduction

History of Enron is a story that started very well. It was a real business with a tremendous reputation. It had created a market for trading. The best people worked there. Enron Corporation was a giant of American energy industry. Prior to its bankruptcy December 2, 2001, Enron had about 22 000 employees and was one of the world’s important manufacturer of electricity, natural gas, communications, and the owner of the pulp and paper companies, with revenues of nearly $101 billion in 2000. In general, who does not hear about Enron? It is the most scandalous president deception with huge number of shareholders ...

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Enron was believed to be one of the leading, innovative corporations of the world. The company that received the “America’s Most Innovative Company” award for six years in a row by Fortune magazine saw a sudden fall in 2001 and shocked the entire industry. The fall of the giant corporation did not only affect the industry but also shattered the dreams of the employees and stockholders of the company who had been bedazzled by the great profits.
The factors behind the fall of this huge corporations were never identified before ...

Introduction

White collar crimes are the crimes are nonviolent financially motivated crimes. Typical white collar crimes are fraud, bribery, industrial espionage, etc. In October 2001 the Enron company was involved into the ethnical and criminal scandal. The company’s CEO and CFO developed schemes of hiding billions of dollars from stakeholders, as well as from the tax department. This paper is devoted to one of the most famous white collar crimes in the world. The first part of the paper will contain the brief overview of the scandal. In the second part of the research paper, I will analyze the ...

The Enron Crisis reveled in October 2001 is one of the greatest auditing scandals in the history of the United States of America (USA). It involved Enron Corporations which traces its history to 1985 when it as born from the Houston Natural Gas InterNorth (Fusaro and Ross, 2001). This followed the decision of Kenneth Lay to amalgamate the two firms to form one big corporation which have a dominant control over the energy market in Texas. Despite its enormous growth, Enron’s troubles began after hiring Jeffery Skilling as one of its topmost officers who were at the helm of ...

Enron Company by Kenneth Lay in 1985 began its operation after the merger of two companies, Houston Natural Gas and InterNorth Company. Under Kenneth Lay as the Chief Executive Officer of the company, the company started hiring employees. The company had a significant number of 21, 000 employees and an outstanding production performance. Its headquarters was situated in Houston, Texas. After the merger of the two companies, Enron was praised for its effective strategies of penetrating the market and acquiring a significant income. Its main objective was to create market for further expansion and diversification. The company employed some measures in ...

Executive summary

The incessant emergence of corporate scandals impacts’ tremendously on the holdings of individuals and institutional investors, there is unique aspect projected by the recent number of scandals from the past occurrences. This is stipulated by the fact that the recent occurrences of scandals involve facets of businesses, these ranges from individual firms and corporate companies. This is in contrast with the past scandal aspects which projected associations relating to specific sectors within the market. The current or recent scandals involve corporate officers, the accounting industry and investment banking houses. The large and diversity of the scope of the recent ...

1. Given the corporate ethical breaches in recent times, assess whether or not you believe that the current business and regulatory environment is more conducive to ethical behavior. Provide support for your answer.
Unethical conduct has been all-pervasive in all sorts of business for the last few decades. Many changes have taken shape in the business environment giving rise to immoral behavior and the inclination for corruption. Unethical accounting behavior is the consequence of the growing corruption that has engulfed the corporate world. After the unethical accounting scandals like the Enron, WorldCom, Peregrine Systems, Adelphia and Tyco International ...

Business Law: ENRON SCANDAL

Introduction
The scandal that is Enron stands out among other corporate scandals such as WorldComm, Global Crossing. At Enron, the situation is illustrated of how the free enterprise system in the United States of America and the unregulated trust vested on auditors can be abused by a group of selfish and individualistic capitalists determined to make good of a bad situation. The case also illustratively points out the effects of corporate pressure from the shareholders on the management and the weaknesses of the stewardship concept of management of shareholders wealth. Enron puts a clear case of the need to have strong ethical ...

Accounting profession requires a lot of skills and ethical knowledge. This is because there are numerous temptations that accountants face such as pressures to satisfy investors or to maintain an upward revenue growth. As such, ethics are essential since accountants who maintain ethical behaviours are able to develop inner strength. This helps them to make ethical decisions which will ensure that a firm prospers in the long run. A professional accountant is expected to possess various principles. These principles include objectivity, integrity, professional behaviour, confidentiality, and professional competence. This paper discusses whether the current business and regulatory environment is conducive for ...

Abstract

This paper does an analysis of Enron’s debacle and why it was termed as the biggest and the most complex financial fraud in U.S. history. The paper highlights the desperate attempts by the bankers, auditors and top leadership at Enron Corporation to hide the actual liabilities. They successfully did this by balance sheet management and skewed accounting treatments permissible for using the restructured assets under financial reengineering. The attempts to show profits led the top leadership at Enron and the entire financial system to abet in the svelte white collar crime of fooling the investors by dressing up ...

Background Information of Enron

Enron’s history as an entire corporate entity begins in 1985 when Kenneth Lay arranged a formation of Enron by means of combining Internorth and Houston Natural Gas (NPR, 2002). Internorth and Houston Natural Gas operated as “natural gas pipeline companies”, therefore, Enron obtained ownership of and control over thousands miles of gas delivery pipelines connecting producers to customers via intermediary firms (Healy & Palepu, 2003, pp. 4-5). Hence, Enron was first engaged in buying natural gas from drilling companies and reselling it to intermediary companies which, in turn, sold it to final users (p. 5).
In furtherance, Enron’s ...

Introduction

Enron scandal which took place in 2001 had become known all over the world for its unprecedented span. In accordance with BBC (2002) top management of the company was incriminated in concealment of the actual financial situation, namely: providing its stakeholders with irrelevant information about profits and debts of the company.
The current paper is to investigate causes and consequences of Enron scandal and discuss the Sarbanes Oxley Act of 2002 (SOX) points with respect to this case.

1. Brief Outline of Enron Crisis

Enron scandal had far-reaching financial and political implications which influenced economical and political life of the United States and the ...

Examining a Business Failure

Introduction

Enron was a multibillion energy corporation that suffered a catastrophic collapse due to a financial scandal. The scandal involved the company’s top leadership, and the company’s external auditors and accountants. The accounting firm in this case was Arthur Andersen. The Enron scandal involved fraudulent procedures and practices in the accounting section. These illegal practices took place in the 1990s and overlapped into the next decade. Some of the fraudulent activities included the manipulation of the company’s stock prices. This resulted in the company’s decision to file for bankruptcy at the end of 2001.There are specific organizational behavior, ...

Enron Corporation was one of the world’s top electricity corporations that underwent a financial indignity, which involved Enron and its bookkeeping company. The scandal comprised of the detection of unbalanced accounting techniques, which occurred through the 1990s. This resulted in Enron filing for insolvency in December of 2001 (Thomas, 2002). The aim of this paper is to define how organizational behavior theories could have anticipated or illuminated Enron’s failures.
Organizational behavior, is described as an area of study that explores the influence that groups, individuals, and structure have on performance inside the organizations for the aim of ...

The complete lack of ethical leadership displayed in the Enron scandal has hardly been unique over the last decade, but rather seems to be one of many examples of massive corporate fraud, corruption and lack of social responsibility to employees, consumers, shareholders and the general public. Fraud and corruption on Wall Street and the mortgage industry resulted in the worst financial meltdown in history, and WorldCom under the leadership of Bernie Ebbers collapsed in one of the worst corporate frauds in history. Over the last decade, public confidence in corporate leadership and the economic system in general has been ...

Question 1. How do morality, ethics, and leadership play a role in shaping good and bad business?

Answer. With Enron and other similar scandals flummoxing the corporate world even now, the significance of morality, ethics, and sincere leadership automatically comes to the fore. There is no debating around putting the business into ethics or putting ethics into the business. Literature endorses that sustainable and fruitful business enterprises share values with the societies they operate in. The absence of this trait may put them under legal scanner or render them insignificant in the eyes of stakeholders.
Statistically speaking, 59 percent of respondents, in a survey conducted in 2006, rated their school programs as good for integrating ethics ...

Introduction

Mark to market, also called fair value accounting, has been one of the most controversial accounting methodologies in financial reporting. Mark to market refers to an accounting process in which the reporting entities report the value of assets and liabilities as per the current market value as opposed to the book price thus making the methodology highly subjective (Association of American Bankers, 2016: Serakibi, n.d.). Therefore, since the reported value is pegged on the prevailing market value, it follows that the value of the financial statement would change as the market changes. In most cases, the change in value ...

Introduction

The research seeks to identify ethical issues relating to advertising, marketing, intellectual property, and regulation of product safety. The paper takes a position against drug companies using Direct-to-Consumer (DTC) marketing. The paper also determines who currently regulates the compounding pharmacies regulatory scheme and what the Food and Drug Administration (FDA) should have done and if they should be given more say and power over compounding pharmacies. Again, the paper determines whether the use of Colberian intellectual property by PharmaCARE’s would be ethical in accordance with Deontology or not, virtue ethics and utilitarianism. The paper analyzes how PharmaCARE protects itself ...

The seemingly endless series of scandals affecting companies raises many controversies, questioning the involvement of intelligent executives in unethical behavior. Company control has drawn world consideration when the giant firms such as Enron in UK and WorldCom in US downfall in 2001 and 2002 successively. This paper seeks to analyze the relationship between the various ethical and regulatory, as well as governance issues.
The primary ethical principle that applies to accountants is integrity, objectivity, and competence. Integrity refers to being honest and forthright in dealings and communication with others; objectivity means impartiality and freedom from conflict of interest. ...

Introduction

Nowadays we cannot help but see and hear many troubling things are going on around us. The news overflows with incidents of corruption scandals—of poverty and hunger. The real median income of America has increased only 15% in the last 30 years (Bakan, 2006). That is a .5 % growth each year versus the 1.9 % real GDP growth per year (“A History of Standard Living”, n.d.). How can that be? Where is the American dream? These and other symptoms are a result of the rise and power of corporations. Corporations cause great harm to the society by being amoral, by creating ...

Accounting refers to the activities of recording, summarizing, maintaining and publishing financial statements for public, etc. These activities play a vital role not only for internal users of the information but also for the external users who might raise issues and concerns to the work being carried out. It is essential for the investors to get the correct picture of the business before taking the risk of investing in the venture. The ethical practice also enhances the performances and procedures of the organization.
Ethics relate to segregating what is good or bad for the consideration of the moral duties ...

Introduction

Throughout this discussion, we will analyze the history of life insurance companies, any major events which impacted the life insurance industry, including the Great Recession of 2007 which lasted for two years, rules or regulations proposed by Congress that govern the present operation of life insurance companies, including any changes of insurance laws, the current Presidential candidates plan on implementing for the life insurance industry and future expectations of the operational life insurance environment.

History

The life insurance industry began in the ancient city of Rome around 100 B.C. The Roman militant leader named Caius Marius, had created a certain ...

Global Crossing Limited is an example to all regarding the failure of a proper audit of financial statements. It was a telecommunication company which had gone through the scandal in 2001. The scandal was caused due to reporting of the financial statements against the audit purpose. The management is highly responsible for the preparation and presentation of the financial statement, the auditors and the management did not exercise professional care and did not investigate about many issues which were wrongly reported in the financial statements. This led to the downfall of a highly ambitious company. The company went through five chief executives ...

Impact of the Sarbanes-Act on the Threats to Auditors’ Independence

The last decade of the 20th Century and the early 2000’s witnessed an increased rate of corporate scandals and audit failures in major companies not only in the United States in the entire world. However, it is U.S that mostly felt the pinch with companies such as Enron, WorldCom, Global Crossing, Xerox, and Adelphia almost collapsing. The scandals saw the enactment of the Sarbanes-Oxley Act in 2002 which served as the ‘messiah’ in the accounting sector by introducing major revolutions. Analysts had for a long time criticized the accounting profession because of its apparent inability to control/self-regulate itself. ...

Criminal Law

WHITE COLLAR CRIMES
The topic corporate or white collar crimes due to prevalent scandals in the global corporate scene that occurred during the recent years witnessed by U.S. and European companies and their counterparts in the other parts of the world such as “corporate frauds,” “corporate breakdown,” “accounting scandals,” “corporate scandals” as the major controversies surrounding the corporate world (Ball, 2009).
Buell (2014, p. 827) has defined a white collar crime as “one that is committed by a person of respectability and high social status in the course of his occupation.” Corporate crimes are caused by various factors and ...

1.0 Introduction
In the 1980s, serious corporate scandals were witnessed forcing scholars, researchers and other stakeholders to wonder whether the existing regulations were adequate to maintain the stability of companies. The need to reconsider the manner in which companies are regulated was further enhanced by an increase in the number of corporate scandals between 2001 and 2002. Due to corporate scandals involving highly esteemed companies like Enron and Arthur Andersen made regulatory agencies among other stakeholders to come up with regulations that would be affective in curbing such scandals. The Sarbanes-Oxley Act was signed in 2002, and the ...

The most important skills that a forensic accountant needs to possess.

Forensic accountants assist individuals and organizations by the provision of management support in the form of reviews of fraud, detection, and litigation. Their prime involvement follows a discovery or suspected fraud that requires investigations. Additionally, they consider issues such as the effects that fraud investigations might have on relationships between employees, management, and corporate image (Singleton and Singleton, 2010).
Consequently, it is crucial that a forensic accountant possess more that the fundamental skills and knowledge of auditing and accounting. Indeed, auditing forms a platform for a forensic accountant by its ability to the provision of an understanding of internal controls and materiality ...

Question One: Insider Trading

For the longest time possible, the concept of insider trading in business has been considered unfair, inequitable and against the spirit of fair competition in business. Insider trading is opposed for the simple reason that it does not afford all players in the market all the requisite information used in arriving at decisions as to whether to invest or not. Two critical arguments are availed against insider trading. These are the property rights and the fairness principle. This paper shall discuss the two arguments in much detail.

It is argued that insider trading dispenses with the principle of fairness ...

Introduction

Corporate governance has sprung out as a concept in response to the increasingly critical corporate scandals that were taking position in the late 1900s. The concept has remained strongly concerned with the areas of corporate risk. Nonetheless, the notion surrounding Corporate Governance is becoming more widely applicable and useful, for both the small and big organizations. The concept is also an increasingly substantial facet of a job and organizational management that transcends to global government and trade laws; as easily as to the international corporations, organizations and markets. The term corporate governance is a conglomeration of two words; corporate and management. The ...

Business Ethics Capstone Project

Introduction
Business and ethics are really important in all aspects of life. There is the need for every human being to follow rules and this includes generally accepted morals as well as laws. In most cases, laws seem to evolve from morals and generally accepted customs and practices. However, laws come with specific sanctions whilst morals often come with softer consequences like reputational issues. There are many situations where organizations set up ethics as a means of ensuring that the workers observe moral standards in order to reduce the risks of legal problems and issues in its operations.
Ethical ...

Introduction

The CFOs have a lot to deal with as their strategic responsibility in business continues to grow and become more complex. Owing to their extensive duties, the cash compensation of the financial officers continues to increase with each passing year so much that the officials are starting to bridge the gap between CEOs and them. The financial market appears to be more inclined towards a skill-driven workforce as compared to the traditional approach of leadership provided by the CEOs. This essay attempts to develop an understanding concerning the issue of the rising salary of CFOs by using three primary ...

Learning Activity 1

The basic assumptions that an organizations holds forms the basis of an organization's culture. These assumptions can be deeply enmeshed in the culture of an organization so much so that they may even go unnoticed. Yet, at the same time, the basic assumptions are in fact the essence of what makes up a culture. But basic assumptions are the essence of culture. As such, they are the real truths of organization's lived principles. Assumptions are the line which squares itself against espoused values and artifacts. An example of an assumption held in a working call center in a large ...

Introduction

The present day corporate world is well aware of the increasing cases of accounting fraud. Governments and regulatory bodies are finding themselves in embarrassing situations after corporation’s collapse, even after receiving a clean bill of financial health from their auditors, a landmark case being that of Enron. These incidences have led to the accounting regulatory bodies, securities regulatory bodies and other government institutions mandated with the regulation of the accounting profession to demand that auditors are accountable for their actions or omissions in the performance of their duties. In the case study below however, there is a conflict of the law ...

1 Introduction
This research paper discusses the history of financial auditing. Studies indicate that financial auditing has been evolving through many stages. In the 18th century, the practice of financial auditing was a traditional conformance to the role of auditing. It is clear that the auditing paradigm has been changing and will continue shifting into the future. Financial auditing originated from checking procedures in ancient civilizations such as Greece, Egypt and China. The industrial revolution period established the role of financial auditing. The Institute of Certified Public Accountants in America and The SEC (Securities Exchange Commission) play a critical role ...

In recent times, the term ‘Work Environment’ has gained tremendous importance where employee job satisfaction is concerned. Version 2 of the PCMM or People Capability Maturity Model says that the purpose of Work Environment is to establish and maintain physical working conditions and to provide resources that allow individuals and workgroups to perform their tasks efficiently without unnecessary distractions . While this definition encompasses the literary meaning of the term Work Environment, it does not entirely cover the psychological and emotional affect that the environment has on an employee. Since most people spend the majority of their waking hours at ...

Shown below is an interesting list of companies with equally interesting issues they have faced in the last 10 years from Forbes Magazine ( 2008). What is interesting to find here is the depth of corporate and personal unethical cases involving people of relatively high educational standings and social standing. The alarming frequency and magnitude of these unethical practices are staggering to say the very least, and yet there seems to be a large scandal waiting to be uncovered every day. This century marks the recognition of dealing with complex business and ethical issues as a priority of corporations around the world.
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Every organization has various cadres of staff at different levels of the organization. All members of staff must work harmoniously so as to ensure that the organization achieves its desired outcomes. Indeed, the actions or inaction of each member of the organization has a bearing on the general outcome that the organization attains. However, while all members of the organization contribute to the outcome of the organization, it is the actions or inaction of the top members which can have the most profound effect on the organization. In other words, the effects of the activities undertaken at the top level ...

Report to CEO

Customer Inserts His/her Name
Background
The contemporary financial reporting regulatory environment has largely been influenced by the Sarbane Oxley Act 2002 (to be referred to as SOX). This act was enacted by the congress of the United States due to a series of financial scandals, the most notable of which were the Enron and WorldCom scandals that were brought primarily due to irregular and confusing accounting practices, which resulted in the misrepresentation of the actual financial positions of the above mentioned organizations, resulting in artificial values being allotted to share prices and subsequently causing the plummeting of stock ...

The paper by KPMG and the Institute of Chartered Accountants in Australia addresses some of the most pertinent issues in the business world today. These include the risks, compliance and governance. Modern business leaders will appreciate the complexities that underlie the handling of these three items in the organization in order to ensure efficient and effective functioning of the business.
The paper takes the view that the functions of risk management, compliance as well as good corporate governance should be interlinked for the success of the business. The authors ponder as to why we have all the three ...