Enron Scandal: Unethical Accounting Practices and Bankruptcy
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Added on 2023/04/22
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This article discusses the Enron Scandal, which was caused by unethical accounting practices and manipulation of energy markets. It resulted in bankruptcy and affected workers, investors, and banks. The article also covers the role of key players such as Kenneth Lay, Jeffrey Skilling, and Andrew Fastow.
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Eron Enron Scandal Enron was established in 1985 by Kenneth Lay and it was done after the merger with Houston Natural Gas and Inter- North. It has been observed that in 2001, the Enron Scandal took place at the time when the United States of America was shocked by the reality, that it is known as the biggest successful organizations. By emphasizing on the overall events of the organization and also the bankruptcy issue, it has been noted that the overall result is due to the unethical accounting practices which affected the workers to remain un-worked and also without the end of the overall service. The savings and investments were also lost, in which the shares were purchased in the organization for their trust. The overall outcome was related to greed and in this case, it has been realized by Kenneth Lay that the organization is losing. So, he bought Jeffrey Skilling who bought new ideas and he also suggested the new ways in relation to "mark to market accounting" and later, it has been seen that it was considered by the companies and they started to manipulate the overall energy of the markets. The plan given by him, in relation to trading of the natural gas as a valuable asset was known as one of the best concepts which were adopted by the accounting system. It also helps to ensure the overall growth of Enron to forecast the future. Arthur Andersen, the Enron's accounting company and the Securities and Exchange Commission made an agreement for Enron to consider Mark for market accounting. This was done regardless of the overall revenue which was earned by Enron. The Enron speculated the natural gas and also maintained the books to earn the revenues. Amanda Martin Brock, the executive of the Enron Company elaborated that the committees would also rate the overall peer on the basis of the scale which will be from 1-5 and also the bottom will be 10% of the workers will be fired every year. The skilling needs to bolster the overall confidence of the investor, just because of the price of the company that will never reduce. The promise was made for 10% to 15% returns on the annual basis. The Skilling forced into the various markets and also there were various types in relation to the energy that should be maintained so that continuity can be maintained of the overall price of the stock. He also established different organizations, maintained cooperation with each other and also the records were made to maintain the profits as the actual profits in the financial statements. It was done without the registration of the losses
Eron and also it was considered as the loss in relation to the contract which was happened in California Crisis, India factor, and deal blockbuster and others. Andrew Fastow Chief Financial Officer of the organization was a person whose the overall job is supposed to the disclosed the statistics but in this it has been examined that it was his duty to earn profits for the organization where the registry and manipulation is to bring modification in the numbers and profits that was also affiliated with the assets of the company that should be sold to the big banks. The profits were recorded in the lists of the financial and the debts of the company raised the shares of the company in the financial markets where he focused on the high grades. There are many banks who emphasized to invest with the companies by having the knowledge of the financial situation and also they coveted the overall money markets in which recommendations have to be made by him. It is also known as the biggest reward for the heads and this was based on the overall profit that does not take place. This was only the starting of the end of the Landon, where the entire debts enhanced. The Arthur Andersen also maintained cooperation with the accounting company and he showcased the fake reports. The reports were of the accounting situation of the organization which covers the overall manipulation of the fall of the where it was stopped. He also withdrawal the license to practice the work only after the scandal took place. In many cases, the bank takes the fees and also loan before making an agreement with the customers. They focused on the customer potential and also on the contract have done orally. There are many banks that cooperate with external organizations. In this case, the bank owns the stocks of the company which boost the bank stock prize and also the stock of the share in relation to the bank profits. This behavior breached the local law as there were rules that forbidden the action that will banishment from the market. There are different committees and companies who analyze and control the balance sheets and financial statements of the banks.