Accounting Scandals And Enron Accounting Scandal - 1596 Words

Introduction: In this research paper I will be examining accounting scandals, specifically the Enron Accounting Scandal. First, I will be exploring the history of Enron. Then I will be going into further depth on what accounting issues Enron faced and then I will be explaining what a derivative is. Finally yet importantly, I will consider the different types of Accounting Fraud following a conclusion. Accounting Scandals are born due to collective greed and corporate arrogance. In the case of Enron there was a lot of euphoria before the downfall. Stock prices soared and Enron was seen as one of the most innovative companies in the world. However, things seemed too good to be true. Eventually the company was exposed for its wrongdoing which led to the collapse. Many more of such cases were exposed during the 2008/2009 recession such as the Lehmann Brothers scandal. As mentioned earlier, many financial scandals have happened in the past but none of those are nearly as bad as the scandals when it gets to trading in derivatives. Summary of the Enron Accounting Scandal: In the year of 1985 after the federal deregulation of natural gas pipelines, Enron was born. The company was formed by merging the following two companies: Houston Natural Gas and InterNorth, a Nebraska pipeline company. In the process of the merger, Enron incurred massive debt and, as the result of deregulation, no longer had exclusiveShow MoreRelatedEnron Accounting Scandal1096 Words   |  5 PagesEnron was originally a pipeline company in Houston, Texas in 1985. Enron became a company that was able to profit by providing deliveries of gas to utility companies and businesses. As the deregulation of electric power rose, Enron diversified the business and entered into an energy broker, which traded electricity and other types of commodities. Enron employed several highly qualified PHDs in mathematics, physics, and economics. Enron continued to enter into contracts with customers and utilizedRead MoreEnron Accounting Scandal1706 Words   |  7 PagesThe Enron Accounting Scandal of 2001 There are many accounting scandals that have occurred throughout United States History. Many scandals occur even without outsiders knowing anything that had occurred. Companies try their best to keep many of the accounting scandals quiet. Everyday, there are political and business fraud happening, and most of it goes unnoticed. No company wants to admit that there was a problem or that people within the company are not trust worthy. However, when executivesRead MoreEnron Accounting Scandal1927 Words   |  8 PagesENRON ACCOUNTING SCANDAL The Scandal In the history of accounting, Enron scandal means more than just a legend of accounting managements. It exceeds every other accountings deceit, because the need to secrete its real economic situation was not just a matter of hiding failures borne out of unsuccessful business protrusions. In our summary of the ten major accounting scandals that altered the business world, Enron led the set of white collar crimes committed out of pure gluttony (McLean PeterRead MoreAccounting Scandals And The Enron Corporation1721 Words   |  7 PagesAccounting scandals have happened in numerous companies. In one major case, the firm filed for bankruptcy, and many of its workers lost their jobs, savings, and investments from stocks. This major epidemic happen at Enron, an energy firm stationed in Houston, Texas founded by Kenneth Lay in 1986 (Frontain). On December 2, 2001, the Enron Corporation, an apparently strong and booming business, fell to an all-time low by shocking the world when it filed for bankruptcy protection. Many people wereRead MoreAccounting Scandals. ENRON, WORLDCOM1894 Words   |  8 PagesENRON Enron shocked the world from being â€Å"America’s most innovative company† to America s biggest corporate bankruptcy at its time. At its peak, Enron was America s seventh largest corporation. Enron gave the illusion that it was a steady company with good revenue but that was not the case, a large part of Enron’s profits were made of paper. This was made possible by masterfully designed accounting and morally questionable acts by traders and executives. Deep debt and surfacing information aboutRead MoreAccounting Scandals Of Enron Company1070 Words   |  5 PagesBaasit Kazi Ms. Bogert College Accounting 1-1B 28 April, 2015 Accounting Scandals Reflection Enron was founded in July of 1985. Enron was an electricity and natural gas company which was a fortune 500 company and it was ranked the sixth largest energy company in the world. Enron’s stock went from a peak of $90.75 to $0.67. This was very detrimental to stockholders. Enron’s top executives sold their stock a long time before the stock price fell. A lot of lower level employees could not sell theirRead MoreEthics in Accounting1196 Words   |  5 PagesEthics in Accounting By Pace University – New York Accounting for Decision Making, MBA 640 Fall 2011 Required Research Paper Page 1 of 11 Table of Contents Number Content Page Number 1 Introduction 3 2 Ethics in Accounting 4 3 Enron Scandal 6 4 Satyam Scandal 8 5 Conclusion 10 6 References 11 Page 2 of 11 Introduction †¢ What is â€Å"Ethics†? Ethics, also known as moral philosophy, is a branch of philosophy that addresses questionsRead MoreThe Sarbanes Oxley Act Of 2002 Essay1302 Words   |  6 Pagesthe result of a number of large financial scandals in the United States in the late 1990s and early 2000s. One of the most well-known corporate accounting scandals was the Enron scandal, which was exposed in 2001. Enron, an energy company that was considered one of the most financially sound corporations in the United States before the scandal, produced false earnings reports to shareholders and kept large debts off the accounting books (Peavler, 2016). Enron executives also committed fraud by embezzlingRead MoreCorporate Fraud Has Taken The World By Storm For Over The Past Decade1479 Words   |  6 Pagesfraud cases to ever occur was Enron, Bernard Madoff, Lehman Brothers, and Cendant, with Enron being the largest accounting scandal to ever take place. Prior to Enron’s fraud scandal coming to light in 2001, they were the seventh largest company in the United States by revenue, this was the same year Enron filed bankruptcy (da Silveira, 2013, p. 315). In addition to being one of the largest companies, Enron received numerous awards for their positive business role. Enron received the award for beingRead MorePhar Mor Inc. : Overview1724 Words   |  7 Pagesname the new president of the new company Phar-Mor Inc. and by 1987 had increased to 70 stores and had grown even more to 200 stores by 1990 they then expanded into outlet stores in 1992 which had 25,000 employees in 35 different states. Phar-Mor Scandal In 1992 the bankruptcy of Phar-Mor Inc. cost investors $500 million. Financial problems became known in 1988 when investigation of lower-than-expected profit margin showed that Phar-Mor was billed for inventory because they had not received from Tamco