Enron Corporation And Andersen, Llp - 1904 Words

Enron Corporation and Andersen, LLP 1. What were the business risks Enron faced, and how did those risks increase the likelihood of material misstatements in Enron’s financial statements? Enron was the one of the largest companies that recognized not only in the United States but also around the world. The fall of Enron hurt a lot of people because of the loss of jobs and all the money employees invested in shares of the company with their pension funds. Enron encouraged their employees to invest their money in the company. Any type or move you make in business is a risk. First risk Enron took was when they used the SPE or the â€Å"special business entities† to borrow money but they treated loans to look like revenue, and also not show it on the company financial statement. Since they did not record it on the liabilities such as note payable on their balance sheet, it misinformed their partners and investors into believing that they were generating more revenue than they actually were. Most investors make decisions based on company’s financial statements. Financial statements are prepared by either accounting firms or staff accountants within a company. Every accounting firm follow a standard called GAAP which provides guidelines and rules which companies use when preparing their financial statements. Arthur Anderson accounting prepared for the financial statements for Enron and they lied on the financial to make the company look better than they really were. Another riskShow MoreRelatedEnron Corporation and Andersen, Llp Analyzing the Fall of Two Giants1125 Words   |  5 PagesThe case of Enron Corporation and Andersen, LLP can be noted as one of the most infamous fraud scandals in US history. Investors lost millions of dollars and ruined the public’s trust. Enron was once the seventh largest public company in the United States and Andersen LLP was the world’s largest and most respected business organizations. Enron’s stock prices soared to approximately $100 to less than $10 in 2001. How did these two big giants fall into oblivion and what could have been done to avoidRead MoreArthur Andersen And Enron Cas e Essay983 Words   |  4 PagesThe case is about Arthur Andersen s role in accounting fraud at Enron which was one of its major clients. The criminal charges faced by the firm in the Enron case and how the Enron case eventually led to the closure of Arthur Andersen company. The company was convicted in 2002 of one count of obstruction of justice because of its role in Enron’s auditing. After the conviction, the firm could no longer provide public accounting services. On June 15, 2002, Arthur Andersen was convicted of obstructionRead MoreArthur Andersen s Enron Case918 Words   |  4 Pages The case is about Arthur Andersen s role in accounting fraud at Enron; Enron was one of its Arthur Andersen major clients. The criminal charges faced by Andersen in the Enron case and how the case eventually led to the closure of the company. It was convicted in 2002 of one count of obstruction of justice because of its role in Enron’s auditing. After the conviction, the firm could no longer provide public accounting services. On June 15, 2002, Arthur Andersen was convicted of obstruction ofRead MoreManagement Planning- Arthur Anderson1299 Words   |  6 Pageswithin Arthur Andersen. Specifically, the paper will discuss at least one legal, ethical, and social responsibility issue that impacts Arthur Andersen. Additionally, this paper will analyze the impact these factors have on Arthur Andersen’s management planning. 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The firm of Arthur Andersen LLP was founded in 1913 by Arthur Andersen and ClarenceRead MoreRise Fall of Arthur Andersen, LLP1016 Words   |  5 Pagesï » ¿ March 4, 2014 Rise Fall of Arthur Andersen, LLP Abstract Enron was a natural gas company that was formed in 1985 by Kenneth Lay. By 1992, Enron was the largest selling company of natural gas in North America. In October 2001 a scandal involving Enron was emerging. This scandal led to the fall of the company. The Enron case and many others cases led to the collapse of other companies that did business with them which included oneRead MoreThe Corporate Culture Of Enron1474 Words   |  6 PagesHow did the corporate culture of Enron contribute to its bankruptcy? The Enron Corporation was an energy trading and utilities company that eventually failed due to the discovery that Enron was hiding large debts and losses in financial documents. â€Å"Through its subsidiaries and numerous affiliates, the company provided products and services related to natural gas, electricity, and communications for its wholesale and retail customers† (Ferrell, Fraedrich Ferrell, 2015, p. 486). A company’s corporateRead MoreCase Analysis Arthur Andersen: Questionable Accounting Practices1000 Words   |  4 PagesCase Analysis Arthur Andersen: Questionable Accounting Practices ââ€" Introduction Arthur Andersen LLP, which is over a span of nearly 90 years, would become one of the Big five largest accounting firms in the United States. Moreover, the accounting firm seen as the symbol of trust, integrity and ethic. The good reputation is derived from the advent of consulting business, which was developed by Leonard Spack. However, with the growth of consulting services, many accounting firms viewed it as aRead MoreCase Analysis Arthur Andersen: Questionable Accounting Practices1012 Words   |  5 PagesCase Analysis Arthur Andersen: Questionable Accounting Practices ââ€" Introduction Arthur Andersen LLP, which is over a span of nearly 90 years, would become one of the Big five largest accounting firms in the United States. Moreover, the accounting firm seen as the symbol of trust, integrity and ethic. The good reputation is derived from the advent of consulting business, which was developed by Leonard Spack. However, with the growth of consulting services, many accounting firms viewed it as a sccessfulRead MoreEnron And Corporate Culture Of Enron1322 Words   |  6 PagesIntroduction In 1985 The Enron Corporation came into existence after a successful merger between two gas pipeline companies. The company nurtured a very competitive culture, which encouraged employees to win at any means necessary. Enron’s culture led employees to â€Å"cast loyalty and ethics aside in favor of high performance† (Ferrell, p. 494). The executives of Enron covered up their increasing debt by using special purpose entities. Meanwhile, Enron continued to report increasing profits to their