Bigger Than Enron - 751 Words

Lobbing of commercial and political interests in the establishing of the standards is a fact, which leads to believe that there might be large groups of the financial information users, who are interested in the particular way of reporting. If it is beneficial to them and to the market without compromising any ethical issues related to the financial reporting, if the market gains from such interests, than the standards should be formed under such influence. The question is who is going to decide if there are benefits. I guess, this is the area where the real politic starts. At this level of decision making, I think there should be people free of any political or economic pressure. However, more often commercial and political interests do†¦show more content†¦In the Enron case, The Securities and Exchange Commission (SEC) and Congress conducted an investigation into Enrons collapse. The authorities re-examined the roles of corporate watchdogs, including corporate boards of di rectors, auditors, investment banks, credit rating agencies and lawyers. It could be that the watchdogs had too tight relations with the companys executives. That is why no one questioned the Enrons aggressive accounting strategies. To prevent such collapses, someone needs to look into the possible conflict of interest. The dilemma is that auditors should perform in the interests of the investors, but they are paid by the audited company, which makes it more difficult for them to exercise tough decisions. The auditors should not perform some particular consulting services for the firms that they audit. Another belief is that there should be more severe consequences for those committing financial crimes and causing fall of the companies. Accountants should always carry out the public responsibility, meaning they have a responsibility to ensure that the accounting functions are performed to the highest possible standards and the information which an organisation provides for its stakeholders is true and accurate. To reach the goal of improving the performance of accountants, there might be several steps to undertake. There should be on-going education to keep abreast with the existing and emergingShow MoreRelatedEnron Scandal1477 Words   |  6 Pagesï » ¿Current issue: Scandals in auditing Enron Scandal 1. Introduction Accounting scandals are political or business scandals which arise with the disclosure of financial misdeeds by trusted executives of corporations or governments. These days, not too often, these scandals are splashed as headlines across media. Why? Because there are complex groups of stakeholders who might be seriously affected by the scandals. Enron scam was the most remarkable scandal in 20 centuries by their institutionalizedRead MoreWhy Enron Collapsed?1143 Words   |  5 PagesWhat are the reasons why Enron collapsed? * Investments Enron dealt in energy. According to Infinite Energy, the first and main cause of Enrons collapse was failed investments. Enron invested money in fiber-optic networks, a power plant in India and water distribution in the United Kingdom, to name a few. While a company the size of Enron could afford occasional losses, the mounting, failed investments added up and created a plethora of debt. * Hidden Losses Infinite Energy states thatRead MoreCorporate Culture Of Enron And Bankruptcy1327 Words   |  6 PagesIntroduction The case study is about Enron and about their biggest failure that lead the company towards bankruptcy. Enron got bankrupt to the extent that was no point of returning back and reversing its wrong doings. The only thing that the company had to think about was how to return the losses of its creditors. Enron Corp. was left with $12 billion in assets which was to be distributed among more than 20,000 creditors. Around 80% of creditors of Enron backed the long-awaited reorganization planRead MoreThe Sarbanes Oxley Act Of 20021525 Words   |  7 Pagesat which the Enron Corporation filed for bankruptcy in December 2001, and the accounting firm of Arthur Andersen was sentenced impediment of equity for its activities in shredding Enron-related reports. In 2001, questionable accounting practices bordering fraud surfaced at the Enron Corp and its accounting company Arthur Andersen. Because of these sketchy practices Enron documented an extensive liquidation case and its share costs diminis hed from $90 an offer to minor pennies. Enron Corp bookkeepingRead MoreEnron Case1075 Words   |  5 PagesMINI CASE: THE FILURE OF CORPORATE GOVERNANCE AT ENRON 1.Which parts of the corporate governance system, internal and external, do you believe failed Enron the most? In the evaluation of the Enron’s case; by trying to see the very big picture, it is not only about that the internal part of the corporate governance system was failed or but also the external part of the corporate governance system was also failed. As noted on the last paragraph of the mini case, many people from different positionsRead MoreEnron : A Model Of The Innovative Company1684 Words   |  7 PagesEnron Enron began in July 1985, and its headquarters were in Houston. It started from a small regional energy supplier. However, Enron was dissatisfied with the traditional way of doing business, so it began to look toward energy security. Enron s management believed that the creation of derivative securities market for any commodity was possible, so Enron developed energy commodity futures, options, and other financial derivatives. Energy deregulation brought this company great commercial opportunitiesRead MoreCompany Into The Water Industry1432 Words   |  6 PagesShe decided to venture into the water industry with the existing expertise of natural gas that Enron had already acquired. She started the Wessex Water Co. which was headquartered in Bath, England. Enron purchased Wessex in July 1998 for a price slightly under $3 billion. The venture into the water industry was a good idea as water treatment requires a good deal of energy which was one of Enron’s specialties. Moreover the water industry was a regulated utility and the possibility of a deregulationRead MoreEnron Smartest Guys On The Room1573 Words   |  7 PagesThe movie ENRON smartest guys in the room is about one of the biggest corporation corruptions in the United States. In 1985, ENRON Corporation, was a company that delivers pipeline for natural gas and electricity, while mergering with Houston Natural Gas and Internorth. ENRON quickly grew into a reputable company that generated enormous profits. In a short period of time ENRON was considered one of the top global trading company for natural gas, commodities, and electricity. According to the statistic;Read MoreThe Downfall of Enron1573 Words   |  6 Pagesï » ¿Enron: The fallout from the accounting scandal Determine the primary factors that contributed to the downfall of Enrons financial practices Corporate managers are expected to maximize investor returns while complying with regulatory standards, avoiding principal-agent conflicts of interest, and enhancing the reputational capital of their firms (Patrick Shearer 2002). Before its demise, the energy company Enron was envied for its burgeoning balance sheets. However, gradually it emerged thatRead MoreModern White Collar Crime : A Modern Or Postmodern Crime1079 Words   |  5 PagesSociety has made many individuals question Enron scandal in regards to what is a modern or postmodern crime. Modern white collar crime focuses primarily on agriculture, productive activity, hand-tool technology, and farming villages as a community or family unit. While, postmodern white collar crime deals with more advanced technology such as computers, virtual communities, television/computer link-ups, and telephone communication. Overall, those who seek a career in criminology must navigate terminology