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Enron Essay Topics & Paper Examples

Enron, the Smartest Guys in the Room

Enron was involved in American’s largest corporate bankruptcy. It is a story about people, and in reality it is a tragedy. Enron made their stock sky rocket through unethical means, and in reality this company kept losing money. The primary value operating among the traders was greed, money, and how to make profits under any circumstance. The traders thought that a good trader is a creative trader and the creative trader can find any arbitrage opportunity. Arbitrage opportunity was defined for the trades as the opportunity to make abnormal profits. The traders rocked the prices of electricity over the roof on the consumers’ accounts. Traders discovered that they could create artificial shortages of electrical power so they could push the…

Enron And The Decision Making Factor

Introduction – Students, analysts and critics of modern business practice will always consider the colossal Enron collapse as an important text book case about how a lot of different things inside the company can trigger a nearly overnight downfall of a once prestigious company. If there was any Cinderella story in the world of blue chip trading and high portfolio business, Enron was the ultimate opposite, if not the witch herself who was killed by her own lethal potion. The Enron collapse resulted in the formulating of many different opinions pointing to the many different possible reasons why Enron – with all the promise and potential that it has a few years before it went south – made the nosedive…

Internal Accountant’s Report to Management

Introduction Since our company is preparing for an upcoming government contract bid, management has decided that a full Financial Status Review (FSR) prior to the release of the bid is essential. This report is to provide supporting information prior to the bid in order to evaluate if any irregularities with regard to fraud and/or abuse of the company have taken place and if so, to what effect. The report is divided into four sections, which will cover information on the effect of potential occupational fraud and abuse on the company. It will also discuss U.S. government oversight of accounting fraud and abuse and its effect on the company. Section three will provide potential corruption schemes to be aware of in…

Enron Accounting Fault

Enron is frequently given as an example of creative accounting. It is also given as a good example of accounting fraud and insider trading. This is a good example of creative accounting taken too far – not many would disagree that it was accounting fraud, although some would say they were just unlucky to get caught. after all, the auditors were Arthur Anderson, at the time one of the most respected auditing firms. Creative Accounting – Example 1 – Creating multiple trading entities The creative accounting involved setting up other entities and then trading with these entities. This is a common practice; many businesses divide their operations into sectors that perform specialist functions and then trade is carried out between…

Sarbanes Oxley Act Effect on Internnal Control

19. How has the Sarbanes-Oxley Act affected internal controls? The Sarbanes-Oxley Act was created because of the losses that stockholders experienced due to financial fraud. Because of SOX, internal control of public companies’ management increased. It established provisions that companies should fulfill pertaining to their management and recording of transactions. More thorough and stricter guidelines were created to help companies go about with their activities related to internal controls. This Act increased standards that would help companies get a better control over how they should run things hopefully that would result to regaining the stockholders’ confidence. 20. Discuss the key features of Section 302 of SOX. In Section 302 of SOX, it required that corporate management including the CEO and…

Enron and Worldcom Scandals

1. Which segment of its operations got Enron into difficulties? The guaranteed loans that were intended to bridge the financing for investments from outside investors that could not be found would be the segment of operations that caused Enron difficulties. 2. Did Enron’s directors understand how profits were being made in this segment? Why or why not? Enron’s directors did not understand how profits were being made in this segment because they were kept out of the loop of everything until all the issues became public. 3. Ken Lay was the chair of the board and the CEO for much of the time. How did this probably contribute to the lack of proper governance? Key Lay allowed many things to…

Ethics and Compliance Paper

Starting in Seattle with one store, Starbucks has grown across the country and has become a household name delivering one of the best tasting coffees in existence. The first Starbucks opened in 1971, serving fresh roasted coffees. “Today, more than 15,000 stores in 50 countries, Starbucks are the premier roaster and retailer of specialty coffee in the world” (Starbucks, para. 7, 2010). The organization has been successful because of excellent managerial skills and implementing sound business decisions. Starbucks mission statement reads as follows: “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time” (Starbucks, 2010, p. 1). The company values its relationships with communities, its stores, business partners, shareholders, and employees. Responsible…

Enron

The Smartest Guys in the Room is the story of one of history’s greatest business scandals, in which top executives of America’s seventh largest company walked away with over one billion dollars while investors and employees lost everything. Based on the best-selling book The Smartest Guys in the Room by Fortune reporters Bethany McLean and Peter Elkind, and featuring insider accounts and incendiary corporate audio and videotapes, this tale of greed, hubris and betrayal reveals the outrageous personal excesses of the Enron hierarchy and the moral vacuum that led CEO Ken Lay—along with other players including accounting firm Arthur Andersen, Chief Operating Officer Jeffrey Skilling and Chief Financial Officer Andy Fastow—to manipulate securities trading, bluff the balance sheets and deceive…

Bernie Madoff

The things I will be talking about are the ways they examined the financial events surrounding Bernie Maddoff, and the events surrounding Enron. Also they way that Enron dealt with the consequences and implications for the lack of code of ethics. The financial events that were surrounding Bernie Maddoff where that “ the financial world begins this week still in a daze over the spectacular collapse of an alleged Ponzi scheme by onetime Wall Street legend Bernard Madoff — possibly the biggest swindle ever committed by a single person. It’s “a stunning fraud that appears to be of epic proportions,” Andrew Calamari of the Securities and Exchange Commission’s New York Regional Office said in a statement after the FBI arrested…

Analysis of Hp Financial Statement

Kenneth Lay formed Enron in 1985, when InterNorth acquired Houston Natural Gas. It was once the seventh largest company the United States of America. Enron branched into many non-energy-related fields over the next several years, including such areas as Internet bandwidth, risk management, and weather derivatives (a type of weather insurance for seasonal businesses). Although their core business remained in the transmission and distribution of power, their phenomenal growth was occurring through their other interests. Fortune Magazine selected Enron as “America’s most innovative company” for six straight years from 1996 to 2001. Then came the investigations into their complex network of offshore partnerships and accounting practices. The Enron scandal was revealed in October 2001 that eventually led to the bankruptcy…

Ethical Observations

Unethical accounting behavior and the resulting practices of it within businesses today is a very hot topic since the Enron accounting scandal of 2001. One might ask how does a scandal of this proportion come to be and can it happen again? What situations could lead to unethical behaviors and practices in accounting today that might cause history to repeat itself? The author intends to answer these questions and shed light on some insight of accounting ethics today. By the end of 2001 investors and the public needed something to restore confidence in the way businesses handled accounting and reporting practices. The Sarbanes-Oxley Act was passed into law in July 2002 with the intent of protecting investors by improving financial…

Ethics in Our Everyday Lives

This paper will discuss how ethics relate in our everyday lives and more specifically how ethics are used in our workplace also how ethics are used by companies. This paper will also cover how businesses have implemented ethical procedures, standards and how these businesses flourished because of the effective use of ethical standards. “I consider ethics, as well as religion, as supplements to law in the government of man.” Thomas Jefferson Ethics in our Everyday Lives. As a society we are faced with ethical problems every day, and how we handle these situations shape our culture and lives. However, what are ethics? The meaning of “ethics” is hard to pin down, and the views many people have about them are…

Unethical Behavior of Financial Accounting

Accounting can be best described as a type of tool or language put in place in order to provide appropriate information with regards to the financial position of an organization, corporate or business. With this kind of information, it will always be critical to investors as it provides them with relevant and thorough information that could turn out to be the deciding factor whether to invest or not to invest in a particular organization. Hence, it is very common to find unethical behavior in accounting practices in many different forms. Variety of situations that might lead to unethical practices in accounting include: • Misleading financial analysis in order to obtain personal gains • Misuse of funds (Liquidity) • Exaggerating revenue…

Corporate Governance Mechanism

Executive Summary This paper will reviews the extent to which corporate governance acts as efficient tool to protect investors against corporate fraud, thus contributing to summarize the literatures on role of corporate governance on preventing occurrence of corporate fraud. In a more recent study, corporate fraud is part of earnings manipulation done outside the law and standards. Whereas, the activities covered by the terms earnings management (such as income smoothing and big bath) and creative accounting (or window dressing) normally remain within the regulations. In this regard, corporate governance mechanism, particularly effective boards, audit committees, and auditors, decrease the likelihood of corporate fraud occurs. At very last contemplation, vigilant structure within corporation as holding stakeholders interests with shift in ethics…

Key Stakeholders

Question 1: Who were the key stakeholders involved in, or affected by, the collapse of Enron? How and to what degree were they hurt or helped by the actions of Enron management? Answer: Enron’s board was made up of 17 members. Out of 17, 15 were outsiders and only 2 were insiders. These two key stakeholders were insiders of Enron named Kenneth L. Lay (Enron CEO) and Jeffrey Skilling (President & Enron COO). They were helped my Enron management in lot many ways. Company gave huge compensations to these executives like Skilling held 5% stake in retail energy unit, which was almost equal to $100 worth of stock in 1998. Company often used to lend money to its top executives…

Decision Making and Enron’s Control

Introduction – Students, analysts and critics of modern business practice will always consider the colossal Enron collapse as an important text book case about how a lot of different things inside the company can trigger a nearly overnight downfall of a once prestigious company. If there was any Cinderella story in the world of blue chip trading and high portfolio business, Enron was the ultimate opposite, if not the witch herself who was killed by her own lethal potion. The Enron collapse resulted in the formulating of many different opinions pointing to the many different possible reasons why Enron – with all the promise and potential that it has a few years before it went south – made the nosedive…

An analysis on the sudden decline of Enron in 2001

Enron was company that was formed to the Northern Natural Gas Company which traces its existence to the early 1932 in Nebraska. The company was reorganized back in 1979 and formed as the leading subsidiary company of Internorth. In 1985 the company acquired the smaller Houston Natural Gas and in the process it formed its name to Enron. (Haney 2001, p. 28) Originally the company was involved in the transmitting and distributing electricity and gas in the United States. It was also involved in the development and building of power plants and pipelines. The company extended its services to the rule of law and in other infrastructures in the world. The company owned large had a large network of natural…

Enron Corporation

Enron Corporation began as a small natural gas distributor and, over the course of 15 years, grew to become the seventh largest company in the United States. Soon after the federal deregulation of natural gas pipelines in 1985, Enron was born by the merging of Houston Natural Gas and InterNorth, a Nebraska pipeline company. Initially, Enron was merely involved in the distribution of gas, but it later became a market maker in facilitating the buying and selling of futures of natural gas, electricity, broadband, and other products. However, Enron’s continuous growth eventually came to an end as a complicated financial statement, fraud, and multiple scandals sent Enron through a downward spiral to bankruptcy. During the 1980s, several major national energy…

Reporting Practices and Ethics

Introduction Reporting practices and ethical standards are the most important building blocks that are needed to build a successful health care organization or any business. These reporting practices and ethical standards prove to be the upmost important practices in any health care organization. When reviewing all the variables and factors, one considers the principals listed in the generally accepted accounting principles. There are several factors to consider and inforce these principles in an organization. To successfully implement generally accepted accounting principles and execute corporate compliance, an organization should consider in order for building a successful organization; ethics, fraud and abuse are all key components for maintaining a successful health care or business organization. A successful organization cannot be successful unless…

Capstone Case Study – Arthur Andersen LLP

1. Discuss the environmental, strategic and organizational changes that occurred over the life of Andersen in the context of figure 11.1. While Andersen started off as a stable environment, once changes started being made to the main focus of the company many changes were expedited. While still successful in it’s auditing business, other opportunities arose that allowed for quicker and more dynamic revenue growth. This strategic shift from auditing only to offering a number of other services (automated bookkeeping, information technologies, consulting, corporate staffing) eventually led to a rift within the company, the separation of operations into two companies under one umbrella, and the eventually severance of those two companies into two wholly separate corporate entities. Once the two companies…

Reporting Practices and Ethics

The four elements of financial management are planning, controlling, organizing and directing, and decision making. These four elements will be defined and explained in this paper. Also emphasized will be the accepted accounting principles and the general financial ethical standards. Examples of ethical standards of conduct and financial reporting practices will be explored and notated in this paper as well. All of these points are important in the accounting practice of health care management to help the organizations run smoothly and to be financially stable. Four Elements of Financial Management Planning lets a health care organization set goals and guidelines to make sure their office is a success and that all accomplishments are met. Controlling is ensuring that all areas…

Corporate responsibility

“Corporate responsibility is part of the liberal elites campaign to destroy capitalism”. Discuss. Based on the view of the economist Michael Friedman (1970), the sole responsibility of any business is to make profit and nothing else. According to him only people fully have actual responsibilities. But his view is now unfashionable due to the fact that recent businesses are now exposed to other areas of corporate responsibility apart from the sole aim of profit making which is based on capitalist perspective. Therefore, it is possible for us to arguevthat corporate respornsibility is part of the liberal elites campaign to destroy capitalism. Businesses today are in a radical state of change and operate in complex societies. To justify the meaning of…

Sarbanes Oxley Act of 2002

Descriptions of the main aspects of the regulatory environment which will protect the public from fraud within corporations are going to be provided in this paper. A special attention to the Sarbanes – Oxley Act of 2002 (SOX) requirement; along with an evaluation of whether Sarbanes-Oxley Act will be effective in avoiding future frauds based on their implemented rules and regulations. The main aspects of the regulatory environment are based on the different laws and regulations the different governmental institutions such as federal, state, and local developed to create control over business practices. The regulatory environment creates a positive business financial operational environment as well as efficiency in management, integration of capital flow and domestic savings. For instance, the Securities…

Reporting Practices And Ethics Paper

As you visit a medical clinic or hospital you may have concerns about the medical care you will receive. You would hope that you will receive fair and ethical treatment from the staff. It is the responsibility of the staff to do the best job possible to service not only the paient but also the employer. There is a need for an ethical foundation, especially in the health care setting. According to “Bringing Ethics And Integrity Into Focus” (2012), “Patients and family members desire high quality care, patient safety and the latest medical technology. But, ultimately, trust in the integrity of the caregiver is the foundation for their peace of mind.” Elements of Financial Management Financial management is vital to…

The failure of Enron

1) What were the individual factors that contributed to the failure of Enron? Briefly explain two key factors. Enron collapsed in large part because of the unethical practices of its executives. Egoism (Self interest) was one of the major factors contributed to the failure of Enron. Enron’s executives put their own interests above those of their employees, company and the public, and failed to exercise proper oversight or shoulder responsibility for ethical failings. They allowed themselves to be motivated much more by what would benefit themselves than what would truly benefit the company. Money, greed, arrogance and hubris led company executives to lose focus on working for the good of the company and to act unethically (Gini,2004). Abuse of power…

Smartest Guys in the Room by Amy Stavely

Enron is unquestionably the most well known ethical scandal of the business world. The only other scandal that even comes close is the Madoff Investment Scandal in 2008. Enron started out as a natural gas company but along the way added electricity along with pulp and paper to its list of commodities for sale. During it’s years of existence, Enron executives Kenneth Lay, Jeffery Skilling and Andrew Fastow falsified earnings reports, skimmed money, artificially inflated stock prices and defrauded the company, it’s employees and subsidies of MILLIONS of dollars. Enron finally collapsed after many of its’ executives were convicted of a litany of federal charges and even managed to take it’s auditing firm, Arthur Andersen, down with them. As a…

University of Phoenix Organizational Culture

Organizational culture can be defined as the system of attitudes, beliefs and values that are collectively expressed in support of organizational structure. Organizational culture is a pattern of shared basic assumptions that dictate the behavior of individuals within an organization. Culture determines which practices are appropriate and which are not, effectively developing standards, guidelines, and expectations for individuals within an organization. Although they work hand in hand, there is a definite distinction in the beliefs and the values that make up organizational culture. The beliefs of an organization are assumptions of the way things are, while values are an assumption about the way things should be. By that definition, beliefs constitute the day-to-day actions of a company (how things are…

Ethics and Social Responsibility

Ethics and social responsibility are a part of everyday life around the globe. From the time a business begins, ethics and social responsibility play an important role in deciding what direction that business will take, and how the company will turn a profit. Ethical behavior is critical to strategic planning for businesses. In order to be successful, businesses must consider themselves a part of the business community, as well as society. Making money is not unethical; however, money cannot be the driving force of ethical thinking within a business (ethics.org, 2008). This paper will discuss the statement “strict government regulations are necessary to make companies behave ethically”. An examination of this statement in accordance of ethics and social responsibility, as…

The Public Company Accounting Oversight Board

The Sarbanes-Oxley Act created the Public Company Accounting Oversight Board (PCAOB) to assume the responsibility of overseeing the auditors of public companies. The PCAOB is a private-sector, non-profit corporation. It was established to “protect the interests of investors and further the public interests in the preparation of informative, fair, and independent audit reports”. (The PCAOB) Although the PCAOB is a private sector organization, it has many government-like regulatory functions. The PCAOB was created in response to an increasing number of accounting restatements by public companies during the 1990s and a series of recent high-profile scandals like Enron and WorldCom. Prior to the PCAOB, the audit industry was self-regulated through the Public Oversight Board of the AICPA, but with the recent…

Essay on Macbeth comparing to current events

On March 16, 1988, Saddam Hussein launched an attack on people in his own country. 5,000 Kurds were dead, and 7,000 were either injured or had long-term illnesses. The attack was in Iraq’s city of Halabja and President Hussein only attacked because the Kurds did not support him, and he was retaliating. This ruthless destruction of innocent people proves that still in the world today there are people who are greedy, have ruthless ambition, and do not care how many lives they destroy, only if they can end up on top. In the play Macbeth by William Shakespeare, the main character was described as a greedy, heartless, and ambitious individual who was swayed into evil and let his ambition take…