Enron: The Smartest Guys In The Room

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The film, “Enron: The Smartest Guys in the Room” highlighted a plethora of unethical behavior. From the start, Kenneth Lay was determined to turn a profit and only surrounded himself with individuals who were equally determined. Kenneth Lay, CEO, made numerous decisions on with poor ethical conduct. When faced with debt, Lay encouraged employees and traders to do what was needed to produce a profit. This poor leadership paved the way for poor decision making by all involved.
The addition of Jeff Skilling showed that Enron was looking for more innovative ways to manipulate their books and appear profitable. Skilling proposed a change to Enron’s accounting structure to mark-to-market. This structure helped to hide Enron’s poor financial status and mislead investors. The mark-to-market …show more content…

These numbers were ideally from the company’s projected earnings, not the actual earnings. This system was highly flawed and allowed for misleading financial statements that masked Enron’s debt. Even more disappointing was that Enron’s unethical behavior was not stopped by banks, auditing firms, etc. Those who conducted business with Enron seemed to turn their head when dealing with Enron’s financial status. According to the U.S Securities and Exchange Commission, “As alleged, by matching mark-to-market earnings with cash flow from operating activities, Enron sought to convince analysts and credit rating agencies that its reported mark-to-market earnings were real, i.e., that the value of the underlying assets would ultimately be converted into cash. The Commission further alleges that these institutions also knew that these structured finance

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