The Enron UPS AND DOWNS Case Study
Added on 2021-05-31
13 Pages2506 Words57 Views
Running Head: ENRON’S UPS AND DOWNSCase Study Student Name Institution Date1
Running Head: ENRON’S UPS AND DOWNSTable of Contents1.0 Introduction..............................................................................................................................31.1 Background..............................................................................................................................32.0 The fall of Enron......................................................................................................................52.1 Accounting Professionals........................................................................................................52.2 Auditors and Accounting Regulations...................................................................................62.3 Breaches of accounting and ethical conduct in Enron.........................................................62.4 Corporate culture in Enron....................................................................................................72.5 Effects of unethical business practices...................................................................................72.6 Code of Ethics and Top Leadership.......................................................................................83.0 A Follow-Up.............................................................................................................................83.1 Integrity....................................................................................................................................83.2 Familiar with regulations and laws........................................................................................93.3 Independent judgment............................................................................................................93.4 Understand the nature of industry.......................................................................................104.0 Conclusion..............................................................................................................................102
Running Head: ENRON’S UPS AND DOWNS1.0 IntroductionEnron organization is a large firm that deals in energy and gas with special duty units which are allies that keep accountabilities and money on several balance sheet with the aim of justifying and evade losses, destruction and making monetary statement have a good look at the times of obtaining cash. The company was damaged when there was an effort of archiving the accountingannals relatively than the real commercial presentation achievement. Apart from the non-consolidation problems of SPE, it was revealed in the case that principle of bookkeeping of auction and reasonable worth had problems too that is based on report on power. Several internaland external factors together with the triggers Enrol transformation from success to failure. E.g. external auditing, management, GAAP and FASB.1.1 BackgroundThere was an indication that the newly appointed CEO, Skilling, to a huge range, reformed the environment and the culture of Enron company. There was alteration of the organization`s operations. There was a believe that Skilling tried to twist the rule so that it could favour him. For instance, followed short-range act attainment and expanded more commercial in the field of money rather than the initial commercial – gas and pipeline. In addition, the environment within the Enron company was found to be around because of the strategies that were performance-orientated plus the policy of inducements that becomes a significant to persons who try to reach the target irrespective of the code of ethics. 3
Running Head: ENRON’S UPS AND DOWNSUndeniably, the failure of Enron was as a result of the CEO`s accountability, governance of the corporate e.g. the accounting team of CFO Andrew Fastow, the outstanding external inspecting practice of Arthur Anderson, officer of the risk management, the review and monetary board the SEC, oversee body. It became a comprehensive and methodical mechanism that Enron should have been wrought properly and easily. Nonetheless, there was scam in a three-way association (Figure 1) that comprises ‘culture’, ‘leadership’, and ‘management control’ that result to conflicts with those who are encountered and the failure ones..The failure encounters and other issues that the Enron faced was based on linkages of three types. One showed a relationship between leadership with management. This is where the leader at the top became very vital to the company to obtain the best performances for the resolution of rewarding individuals so that the organization to create numerical information that is fraud to have the strategies in lined. Second linkage is where the superiority of the leadership which would so great in influencing the culture of the organization. The top leader is considered to be 4
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