The Enron Scandal - 854 Words

The Enron Scandal Background Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. Before its bankruptcy on December 2, 2001, Enron employed approximately 20,000 staff and was one of the world s leading electricity, natural gas, communications, and pulp and paper companies, with claimed revenues of nearly $101 billion in 2000.[1] Fortune named Enron America s Most Innovative Company for six consecutive years. At the end of 2001, it was revealed that its reported financial condition was sustained substantially by institutionalized, systematic, and creatively planned accounting fraud, known as the Enron scandal. Financial Frauds Enron’s downfall is basically the accumulated effect of its†¦show more content†¦Mark-to-Market Accounting Mark-to-market accounting requires that once a long-term contract was signed, income was estimated as the present value of net future cash flows. Often, the viability of these contracts and their related costs were difficult to judge. Due to the large discrepancies of attempting to match profits and cash, investors were typically given false or misleading reports. While using the method, income from projects could be recorded, although they might not have ever received the money, and in turn increasing financial earnings on the books Because of these utilization of aggressive revenue recognition and mark-to-market accounting , Enron s revenues increased by more than 750% between 1996 to 2000, rising from $13.3 billion in 1996 to $100.8 billion in 2000. This extensive expansion of 65% per year was unprecedented in any industry, including the energy industry which typically considered growth of 2–3% per year to be respectable. For just the first nine months of 2001, Enron reported $138.7 billion in revenues, which placed the company at the sixth position on the Fortune Global 500. Special Purpose Entities Enron used special purpose entities—limited partnerships or companies created to fulfill a temporary or specific purpose—to fund or manage risks associated with specific assets. The company elected to disclose minimal details on its use ofShow MoreRelatedEnron And The Enron Scandal847 Words   |  4 PagesThe Enron scandal, discovered in October 2001, eventually led to the bankruptcy of the Enron Corporation, an American energy company based mostly in Houston, Texas, and also the dissolution of Arthur Andersen, that was one amongst the 5 largest audit and accounting partnerships within the world. Additionally, to being the most important bankruptcy reorganization in American history at that point, Enron without doubt is the biggest audit failure. it s ever the foremost notable company within theRead MoreEnron Scandal2929 Words   |  12 PagesLaw and Management Book Review Enron, Titanic and The Perfect Storm - Nancy B. Rapoport Student No: 0834172 Word Count: 1500 1 CILM Book Review 0834172 Two years after Enron filed for bankruptcy in 2001, Nancy b. Rapoport wrote this essay expressing her unique perspective on the real cause of Enron’s demise. This essay catches the reader’s attention instantly, because unlike abundant other articles written on the biggest corporate scandal in American history, the author here rejectsRead MoreEnron Scandal1844 Words   |  8 Pagesï » ¿THE ENRON SCANDAL FACTS OF THE CASE Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. Enron s predecessor was the Northern Natural Gas Company, which was formed during 1932, in Omaha, Nebraska. It was reorganized during 1979 as the main subsidiary of a holding company, Inter-North which was a diversified energy and energy related products company. During 1985, it bought the smaller and less diversified Houston Natural Gas company. EmployedRead MoreEnron Scandal9449 Words   |  38 PagesThe Enron scandal, revealed in October 2001, eventually led to the bankruptcy of the Enron Corporation, an American energy company based in Houston, Texas, and the de facto dissolution of Arthur Andersen, which was one of the five largest audit and accountancy partnerships in the world. In addition to being the largest bankruptcy reorganization in American history at that time, Enron was attributed as the biggest audit failure.[1] Enron was formed in 1985 by Kenneth Lay after merging Houston NaturalRead MoreEnron Scandal Of Enron Corporation Essay1145 Words   |  5 PagesIntroduction Enron scandal which aroused in 2001 was one of the most famous events in the area of fraud audit. As the auditor company of Enron, Arthur Andersen failed to prepare true and fair auditing reports. They both suffered lethal loss at that time. The following paragraphs will discuss this fraud event, including the organization history, the organization’s event, the fraud issue in the event, the consequence of the main stakeholders, auditors in the event and their roles, and the current situationRead MoreThe Enron Scandal Of A Company1193 Words   |  5 Pageswell. What if this company falsifies their records and in a couple of days the company and its stock value go from $90 per share to just a penny per share. You lose your money just because a company cheated and stole your money. This is what the Enron scandal did to thousands of people. It could have been stopped if more forensic accountants in the world are checking on the companies. This way they don’t lie about their stock value. Forensic accountants are in charge of checking business financial recordsRead MoreEnron Accounting Scandal1096 Words   |  5 PagesEnron was originally a pipeline company in Houston, Texas in 1985. Enron became a company that was able to profit by providing deliveries of gas to utility companies and businesses. As the deregulation of electric power rose, Enron diversified the business and entered into an energy broker, which traded electricity and other types of commodities. Enron employed several highly qualified PHDs in mathematics, physics, and economics. Enron continued to enter into contracts with customers and utilizedRead MoreThe Enron Corporation Scandal 1791 Words   |  7 PagesIDENTIFY THE ACCOUNTING PRACTICES THAT WERE ASSOCIATED WITH THE ACCOUNTING SCANDAL. The Enron Corporation failures made world headlines for many reasons ranging from greed from its executives, the alleged malpractice and criminal behaviours, and its quick and disastrous collapse. The most critical factor in Enron’s melt down was the use of creative and manipulative accounting practices to distort reported proï ¬ tability and indebtedness that befell the corporation (A. Holt and T. Eccles, 2002) TheRead MoreThe Enron Scandal Essay619 Words   |  3 PagesThe Enron Scandal In a front-page article with no less than four by-lines (7/03, Enron Triggers a Slew of Proposed Fixes But What Will Stick? by Steve Liesman et al.), The Wall Street Journal reports, As more than 10 congressional committees pursue inquiries, 32 Enron-related bills have been introduced to address ills ranging from auditor conflicts of interest to the scams of an unregulated derivatives market. The Securities and Exchange Commission pledges to reform accounting rules, getRead MoreThe Enron Scandal Of The United States1855 Words   |  8 PagesThe Enron Scandal is still viewed today as one of the largest corporate bankruptcies in history. The greed that spilled throughout the organization started with gradual disregard for basic accounting principles. Initiated by small discrepancies in the company financial system became extreme financial crimes that left many without jobs and many investors penniless. The Enron scandal led to legislation that tightened restrictions on accounting prac tices in the U.S. requiring more strict compliance

The War With Mexican American War - 1328 Words

The war with Mexico is long remembered as an episode, and by no means is it an unimportant one. With the events that led up to its happening, from the Manifest Destiny to the disputes on territory, it has severely marked the United States. American historians regard the Mexican-American war as â€Å"the foulest blot on our national honor†. (sfmuseum.org) Unethical actions were taken gain Mexican territory. Polk and his hunger for land drove him to find some devious way to fight a war with Mexico. His belligerent attitude in regard to this war was the â€Å"foulest blot on our national honor.† However, as one studies the events that led to it, was it an unprovoked act of aggression? Or did the US unjustifiably lure Mexico into one of the bloodiest wars on American soil? The O’Sullivan article on Manifest Destiny sparked an initial interest amongst the American people. The idea that it was the United States’ destiny to expand across the continent became an ardent hope. America had a strong Christian belief that God had intended this for the country. The need for more land became vital as an increasing amount of immigrants flocked to the country each year. As the US gained more land, they steadily began to approach the western part of the continent. At the time, the United States was half of what it is now. The other half was owned by a country that would soon be forced into a two year war. Mexico was once a country half the size of the US. It stretched, as one could say, from coast toShow MoreRelatedThe Mexican American War Essay1223 Words   |  5 PagesUnited States of America has been through many wars, wars concerning many things such as land oil, pride and respect. However, when the United States went to war with Mexico, it was planned over greed. The Mexican- American war was a war provoked by the United States, in efforts to expand the coasts of the country. Mexico was a small under privileged country who had previously to the war had already lost part of their country (Texas). Needless to say this war was cut throat and violent, it was howeverRead MoreThe Mexican-American War Essay870 Words   |  4 Pagesdisregard for the toll a war can take on human lives. When the Alamo was fought back in February 1836, it was about the independence of Texas from Mexico. In retaliation of the death and destruction of human life, Sam Houston retaliated in April and killed 6 30 Mexican soldiers and took General Santa Anna prisoner (Tindall Shi, 2010). This was the start of the independence of Texas and the quest for annexation into the United States, which ultimately led to the Mexican-American War of 1846-1848. ThisRead MoreEssay on The Mexican-American War1466 Words   |  6 PagesThe Mexican-American war determined the destiny of the United States of America, it determined whether or not it would become a world power and it established the size of the United States of America. Perhaps the war was inevitable due to the idea of Manifest Destiny - Americans thought they had the divine right to extend their territory. The Mexican-American War started mainly because of the annexation of the Republic of Texas (established in 1836 after breaking away from Mexico). The United StatesRead MoreEssay The Mexican-American War1216 Words   |  5 PagesThe Mexican-American War. The Mexican-American war was a process of years of battles between the Mexicans and Americans but I think after this informational paper, you’ll seem to know a little bit more knowledge about it. How it all started, well in the beginning, the Americans and Mexicans both wanted to control Texas, but at the time it was a part of the Mexican territory, well soon enough Americans wanted control over it so badly that they started to travel into Texas’s land. Part of the reasonRead MoreCause Of The Mexican American War1864 Words   |  8 PagesThe Mexican-American war, also known as the Mexican war happened between 1846 and 1848 with the participants being United States of America and Mexico. Texas, previously a Mexican state, was the primary cause of the war. A series of disagreements had occurred between Texans and the Mexican government leading to Texas declaration of its independence in 1836. Later, Texas decided to join the United States as the 28th state and this infu riated Mexico. Additionally, border disagreements came up withRead MoreThe American Army in the Mexican War1085 Words   |  5 Pagesrepel invasions. This two level arrangement formed the basis of military establishment during the war. The U.S. army was not prepared for the war. The congress authorized 8613 men and officers for the war but, the actual number was fewer than 5500. Many regimental commanders entered before the War of 1812 but, were too elderly and infirm for an active duty. Looking at the poor state of army during the war, the Congress increased the number of private individual companies to hundred. This turned outRead MoreMexican American War Essay4448 Words   |  18 PagesIntroduction/Background The Mexican American War began on April 25, 1846. The war lasted two years losing many men on both sides. The Mexican war was the third major fought by the United States. In 1810, Miguel Hidalgo y Costilla triggers the beginning of Mexico’s fight for independence from Spain. Mexico gained its independence in 1821 after a long and bloody revolution against Spain. For Mexico, the war between them and the United States was a fight to keep their institutions and national integrityRead MoreCompare and contrast the War of 1812 and the Mexican-American War.1456 Words   |  6 PagesThe War of 1812 and the Mexican-American War are two wars that physically appear two opposites. The War of 1812 involves plenty of naval battles and a few major land battles, while the Mexican-American War involves numerous land battles and few, if any, naval battles. However there are numerous similarities. The War of 1812, The US saw Great Britain as a major problem because of their definition of contraband and the impressment of American sailors into the British Navy. And around this time theRead MorePolitical Outcomes of the Mexican-American War2030 Words   |  9 PagesPolitical Outcomes of the Mexican – American War Post the Mexican – American War in 1846, there would be a plethora of political change that would be inevitable for the Mexicans, and the Americans. These changes would bring about a divide between the two countries that would keep them in a rivalry spanning over numerous decades. However, before this rivalry could occur, something would be needed to induce it. The Mexicans and the Americans would fight against each other for over a year until aRead MoreEssay about The Mexican War as an Exercise in American Imperialism1152 Words   |  5 PagesThe Mexican War as an Exercise in American Imperialism The US government believed firmly in the doctrine of Manifest destiny, the government argued that they had the right and duty to expand through North American because it was necessary and inevitable. During the 19th century Mexico dominated a large amount of North America which was inhabited by American settlers and the American government aimed to expand the USA from the Atlantic Ocean to the Pacific Ocean and were

External or Internal Disaster in Organization Free Essays

Different Business is affected by internal and external factors. These aspects have significant influences on the way business organisations are operating. One of these is the so-called disasters in an organization. We will write a custom essay sample on External or Internal Disaster in Organization or any similar topic only for you Order Now Disasters may be considered as external if the forces happens from the external environment of the organization, like globalization, global financial crisis, technological changes and others while internet disasters are those that happens inside the organization like failure to provide quality service, inability to market the products and service well, inability to handle risks which affects the overall performance of the organization. Primarily, the goal of this paper is to consider an internal disaster from one of the most controversial organizations in the market, i. . the case of Enron. Internal Disaster Aforementioned, one of the most talked-about issues and disasters in the industry is the auditing as well as accounting failure of Enron. It is considered as the largest bankruptcy and stock collapse (Fox 2003). Before the company faced this issue, Enron has been considered as a major American energy industry. The events or disasters that resulted to the bankruptcy and collapse started long before anyone had suspected fraud and anomalies at the industry. In this disaster, two names have been noted: Arthur Andersen and Enron. One of the disasters that challenged the company is the inability of the management to anticipate the wrongdoings of Arthur Andersen. The disasters are centered in auditing aspects just before Enron filed bankruptcy. For example in 1996, Andersen’s audit report regarding Waste Management finances were discovered to be irrelevant and materially false that results in inflation of Income of the company by over $1 billion in the middle period of the 1990s. On the other hand, in 1997, it has been found out by the SEC that Sunbean has used accounting tricks to create false profits and sales and Andersen’s role in this disaster is that he signed-off these financial reports event after an industry partner flagged them. Herein, the company faced major disaster of partnering or hiring an auditing and consulting industries which is distrustful and irresponsible. Although the company has not been aware, Enron still has some plans to prevent such issue. However, the initiative of the company when it comes to their financial audit has been very weak that it leads to their major bankruptcy. To be able to solve this kind of disaster, Enron management has provided disaster plans by identifying the root f the issue. After knowing the problem about Arthur Andersen, the management immediately seeks third party assistance to clear the issue by making Andersen pay for the scandals and anomalies he has done. On one hand, another disaster faced by the company is in line with the inefficient and strategic decision making approach and also having ambiguous and vague firm economic and practice aims. Although Enron has some management plan, the company has not been able to execute this plan well. For instance, The CEO of Enron had various product plans which needed major financial support; the organization during that period was also going through major disasters in their international businesses. In addition, it was not until Enron was financially unstable did the company starts to do something. So as to resolve this kind of disaster, the organization implemented different approaches. However, the strategy of the company only went from one major disaster of loss to the other. Because of the failure of the management of the organization to have strategic decision making, this lead to major disaster of investments and partnerships, the organization’s growth slowed down . As a result more of its inabilities and failures had grown more apparent (Zellner et al. 2001). Bankruptcy and various cases against the company had resulted to their bankruptcy. In addition, various employees of the organization had lost their college funds, life savings, and pensions along with the collapse of the company. Herein, it can be said that the management of Enron must be able to have strategic decision making for the future to continuously sustain the strength of the company. In order to solve this disaster, the organization has been able to initiate a proper and strategic decision-making of the company. Herein, the company’s decision should be made made strategically by identifying first the pros and cons of the decision that they made. The management sees to it that everybody should agree to the decision so that further conflict or risks within the company would not arise. Good decision making can be attributed as one of the vital factors that will help the business to achieve its core mission and objective. This alternative is helpful in a way that it can make the company more competitive and survive in the marketing environment. Conclusion There are many lessons that can be learned from the case of Enron and Arthur Andersen. It can be concluded that, based on the case of Enron, it is important that every individual in the business field should know how to manage or to handle disasters, specifically internal disasters in order for the business to achieve success and to be able to managed it effectively. In our case, it is important that the lessons learned from Enron and Arthur Andersen scandal should serve as enlightenment in making an efficient risk management manual How to cite External or Internal Disaster in Organization, Papers