The Enron Implosion and the Loss of Respect for the...

The Enron Implosion and the Loss of Respect for the Accounting Profession 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†¦show more content†¦Under Skilling’s leadership, Enron Finance Corp. soon dominated the market for natural gas contracts, with more contacts, more access to supplies and more customers than any of its competitors. With its market power, Enron could predict future prices wit h great accuracy, guaranteeing superior profits. Skilling began to change the corporate culture of Enron to match the company’s transformed image as a trading business. He set out on a quest to hire the best and brightest traders, recruiting associates from the top MBA schools in the country and competing with the largest and most prestigious investment banks for talent. In exchange for grueling schedules, Enron pampered its associates with a long list of corporate perks, including concierge services and a company gym. Skilling rewarded production with merit-based bonuses that had no cap, permitting traders to â€Å"eat what they killed.† One of Skilling’s earliest hires in 1990 was Andrew Fastow, a 29-year-old Kellogg MBA who had been working on leveraged buyouts and other complicated deals at Continental Illinois Bank in Chicago. Fastow became Skilling’s protege in the same way Skilling had become Lay’s. Fastow moved swiftly through the ranks and was promoted to chief financial officer in 1998. As Skilling oversaw the building of the company’s vast trading operation, Fastow oversaw its financing. As Enron’s reputation with the outside world grew, the internal culture apparently began to take a darker tone. SkillingShow MoreRelatedEnron Ethical Issue8130 Words   |  33 PagesENRON ACCOUNTING FAILURE AND ETHICAL ISSUES ENRON ACCOUNTING FAILURE AND ETHICAL ISSUES Lecturer: DR SITI ZELEHA ABDUL RASHID Prepared by: SAMIRA ALVANDI SHAHRZAD KARIMI HAMED KHAZAEI 1 ENRON ACCOUNTING FAILURE AND ETHICAL ISSUES ENRON ACCOUNTING FAILURE AND ETHICAL ISSUES 2 ENRON ACCOUNTING FAILURE AND ETHICAL ISSUES Table of content: Abstract†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦..†¦...4 1. Introduction †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦..†¦Ã¢â‚¬ ¦5 2. Literature review †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Read MoreThe Solution of New Century Financial Corporation9605 Words   |  39 Pagesthe United States economy since the Great Depression. As that crisis quickly worsened and spread to the global economy, the search began for the parties responsible for it. Among the potential culprits identified by the press was the accounting profession, in particular, in de- pendent auditors. Mortgage Mess Nearly one-half of recent mortgage foreclosure victims in the United States obtained their loans from so-called subprime lenders that became dominant forces in the mort- gage industryRead MoreEthical Misconduct7357 Words   |  30 Pages people will turn outside the organization – to regulatory authorities, media, or other third parties. The result of such revelations and any ensuing investigations by outsiders means at the very least, acute embarrassment, and quite possibly, the loss of hard-earned corporate reputation. 4. Workers want to be associated with organizations they trust and like, attracting and keeping top talent is a consideration, in addition to the cost of unwanted turnover. In a separate U.S. study that trackedRead MoreThe Solution of New Century Financial Corporation9616 Words   |  39 Pagesthe United States economy since the Great Depression. As that crisis quickly worsened and spread to the global economy, the search began for the parties responsible for it. Among the potential culprits identified by the press was the accounting profession, in particular, inde- pendent auditors. Mortgage Mess Nearly one-half of recent mortgage foreclosure victims in the United States obtained their loans from so-called subprime lenders that became dominant forces in the mort- gage industryRead MoreOrganisational Theory230255 Words   |  922 Pagesexploring organization theory the book increases the understanding of a field that in recent years has become ever more fragmented. Organization theory is central to managing, organizing and reflecting on both formal and informal structures, and in this respect you will find this book timely, interesting and valuable. Peter Holdt Christensen, Associate Professor, Copenhagen Business School, Denmark McAuley et al.’s book is thought-provoking, witty and highly relevant for understanding contemporary organizationalRead MoreProject Mgmt296381 Words   |  1186 Pagespercent of the U.S. gross national product) are spent on projects each year in the United States alone. Other countries are increasingly spending more on projects. Millions of people around the world consider project management the major task in their profession. Project management is not without problems. The Standish Group has tracked the management of information technology (IT) projects since 1994. This firm’s periodic landmark reports summarize the continued need for improved project management. ForRead MoreStephen P. Robbins Timothy A. Judge (2011) Organizational Behaviour 15th Edition New Jersey: Prentice Hall393164 Words   |  1573 PagesLIBRARY The Importance of Interpersonal Skills 1 Demonstrate the importance of interpersonal skills in the workplace. Until the late 1980s, business school curricula emphasized the technical aspects of management, focusing on economics, accounting, finance, and quantitative techniques. Course work in human behavior and people skills received relatively less attention. Over the past three decades, however, business faculty have come to realize the role that understanding human behavior plays