Wait a second!
More handpicked essays just for you.
More handpicked essays just for you.
Essay about the history of enron
Essay about the history of enron
Consequences of the Enron scandal
Don’t take our word for it - see why 10 million students trust us with their essay needs.
Recommended: Essay about the history of enron
Rachael Enrici Mrs. Cravens Literacy Course III 13 May 2014 The Enron Scandal Enron deliberately created artificial shortages in California for electricity, two days in a row, causing the price to skyrocket. Enron is a natural gas and electricity plant/business that buys and sells energy. The most influential historical event that has happened during the 21ST century is The Enron Scandal because the loss sustained by investors exceeded $70 billion and only a small amount of the lost money was returned. The Enron Scandal made millions of investors devastated. Enron’s stock prices were at $90.75 per share and fell to $0.61 in one day, which caused them to go bankrupt that day. Enron had experienced tremendous financial losses. The bankruptcy resulted from arrogance, greed from foolishness from the top management all the way down. Enron made lots of mistakes leading to their bankruptcy. A few people bring trouble to Enron. J. Clifford Baxtor, a former Enron executive, committed suicide after Enron went bankrupt to escape the consequences he would fac...
On the surface, the motives behind decisions and events leading to Enron’s downfall appear simple enough: individual and collective greed born in an atmosphere of market euphoria and corporate arrogance. Hardly anyone—the company, its employees, analysts or individual investors—wanted to believe the company was too good to be true. So, for a while, hardly anyone did. Many kept on buying the stock, the corporate mantra and the dream. In the meantime, the company made many high-risk deals, some of which were outside the company’s typical asset risk control process. Many went sour in the early months of 2001 as Enron’s stock price and debt rating imploded because of loss of investor and creditor trust. Methods the company used to disclose its complicated financial dealings were all wrong and downright deceptive. The company’s lack of accuracy in reporting its financial affairs, followed by financial restatements disclosing billions of dollars of omitted liabilities and losses, contributed to its downfall. The whole affair happened under the watchful eye of Arthur Andersen LLP, which kept a whole floor of auditors assigned at Enron year-round.
The Enron Scandal, which unrolled in October 2001, lead to the bankruptcy of the Enron Corporation, an American energy company based in Houston, Texas, and the de facto dissolution of Arthur Andersen, a large audit and accountancy partnership firm.
The Enron scandal is one of the biggest scandals to take place in in American history. Enron was once one of the biggest companys in the world. It was the 6th largest energy company in the world. Due to Enron’s downfall investors of the company lost nearly 70 billion dollars. This was all due to many illegal activities done by Eron's employees. One of these employees was Andrew Fastow, the chief financial officer of the Enron corporation had a lot to do with the collapse of the Enron company.
As I conclude Eron scandal was very shocking. Enron's mind boggling money related articulations were confounding to shareholders and investigators. A company that reached such great success went downhill in a blink of eye. The company earned billions of dollars and accomplished so many good things within the company. Now all companies are supposed to follow the Sarbanes Oxley
The Enron Corporation was founded in 1985 out of Houston Texas and was one of the world 's major electricity, natural gas, communications, and pulp and paper companies that employed over 20,000 employees. This paper will address some of the ethical issues that plagued Enron and eventually led to its fall.
The film Enron: The Smartest Guys in the Room was a great film loaded with examples of unethical behavior with Enron being an unethical corporate culture. The film portrays the rise and fall of Enron, one of the most corrupt corporations this country has seen. Enron had started off as a promising energy company with a vision to do good, which quickly turned sour when top executives torn the company down while stealing millions of dollars from people. A reason for the downfall of Enron was the deregulation of the electric power markets, which fueled the greed of Enron’s officials. They were the ones that transformed Enron from a traditional energy company into an energy broker.
Before filing for bankruptcy in 2001, Enron Corporation was one of the largest integrated natural gas and electricity companies in the world. It marketed natural gas liquids worldwide and operated one of the largest natural gas transmission systems in the world, totaling more than 36,000 miles. It was also one of the largest independent developers and producers of electricity in the world, serving both industrial and emerging markets.
One cannot talk about or try to explain what took place with the downfall of Enron with out a brief history of the company. In 2001 they were considered one of the most innovated company and was ranked the fifth largest company on the Fortune 500, leading the market in energy production, distribution and trade (Culpan &Trussel, 2005). The company went from handling energy distribution to becoming a diversify company that dealt with many commodities.
“Based on the never-before-published revelations of Sherron Watkins, the Enron Vice President who blew the whistle, POWER FAILURE is a gripping account of the greed, ambition, and arrogance that fueled Enron's rise--and the internal rivalries and financial chicanery that brought the company crashing down. In the late 1990s, Enron was hailed as the model company of the new economy.” (Power Failure: The Inside Story of How Enron's Culture of Arrogance and Greed Led to The biggest bankruptcy in American History, Author: Swartz, Mimi With: Watkins, Sherrin) Enron was a new economy company and is considered as one of the most innovative companies in the US. Ranked No. 7 before its bankruptcy, it expanded into a mega enterprise within a time span of only 15 years. The company filed for bankruptcy so that it can reorganize its operations while protected from the creditors. The company was accused of contributing business funds for political campaigning and to influence politicians through it, trying to influence the national energy policy, not paying Income Tax in the last four years despit...
Enron was in trouble because of something that almost every major corporation during this time was guilty of. They inflated their profits. Things weren't looking good for them at the end of the 2001-year, so they made a common move and they restated their profits for the past four years. If this had worked to their like they could have gotten away with hiding millions of dollars in debt. That completely admitted that they had inflated their profits by hiding debt in confusing partner agreements. Enron could not deal with their debt so they did the only thing that was left to do, they filed for chapter 11 bankruptcy. This went down as one of the largest companies to file for bankruptcy in the history of the United States. In just three months their share price dropped from $95 to below $1.
There are a few key players involved in this scandal that should be highlighted. First, is the founder Kenneth Lay. Lay was the chairman and Chief Executive Officer at Enron until the promotion of Jeffrey Skilling in February of 2001. It was under the management of Skilling that Enron began using ‘mark to market accounting’, defined as “when the value of an asset is updated to its current market levels,” meaning Enron estimated profits from future deals. This strategy helped make Enron one of the biggest gas and electricity wholesalers. Skilling did not last long as the CEO of Enron as he resigned in August of 2001, while also selling large amounts of his shares in the company. Another major contributor to this scandal was Chief Financial Officer, Andrew Fastow. Fastow was the key component to helping the Enron executives gather all this money from the company. David Duncan was another major factor that allowed this scandal to happen. Duncan was Enron’s chief auditor at Arthur Anderson, an accounting firm that provided auditing services. TRANSITION
Enron was a company founded in the year 1985 based in Houston, USA. It was one of the world's largest energy trading and Distribution Company having an income of nearly hundred billion dollars during 2000 and was also regarded as America’s most Innovative companies for 6 consecutive years by the fortune magazine. In the last quarter of 2001, it was exposed that it’s declared financial condition was maintained significantly by systematized and skillfully premeditated accounting fraud, known thereafter as the Enron scandal. They hid major debts and did not book them in the balance sheet. The inflated figures in their balance sheet shot up their stock price to unprecedented levels, taking advantage of the situation executives with insider information traded in millions of dollars of Enron stocks. The senior executives and insiders were aware of the offshore accounts that were covering up losses for the Organization; the investors were kept in the dark. This sent across a domino effect which resulted in shareholders losing seventy four billion dollars, loss of hundreds of jobs and thousands of investors and employees losing their retirement accounts.
Enron Corp. is a company that reached dramatic heights, only to face a dizzying collapse. The story ends with the bankruptcy of one of America 's largest corporations. Enron 's collapse affected the lives of thousands of employees and shook Wall Street to its core. At Enron 's peak, its shares were worth $90.75, but they plummeted to $0.67 in January 2002 following bankruptcy. To this day, many wonder how such a powerful business disintegrated almost overnight and how it managed to fool the regulators with fake, off-the-books corporations for so long.
Enron was on the of the most successful and innovative companies throughout the 1990s. In October of 2001, Enron admitted that its income had been vastly overstated; and its equity value was actually a couple of billion dollars less than was stated on its income statement (The Fall of Enron, 2016). Enron was forced to declare bankruptcy on December 2, 2001. The primary reasons behind the scandal at Enron was the negligence of Enron’s auditing group Arthur Andersen who helped the company to continually perpetrate the fraud (The Fall of Enron, 2016). The Enron collapse had a huge effect on present accounting regulations and rules.
The Enron Corporation was an American energy company that provided natural gas, electricity, and communications to its customers both wholesale and retail globally and in the northwestern United States (Ferrell, et al, 2013). Top executives, prestigious law firms, trusted accounting firms, the largest banks in the finance industry, the board of directors, and other high powered people, all played a part in the biggest most popular scandal that shook the faith of the American people in big business and the stock market with the demise of one of the top Fortune 500 companies that made billions of dollars through illegal and unethical gains (Ferrell, et al, 2013). Many shareholders, employees, and investors lost their entire life savings, investments,