Enron Case - 7190 Words

The Enron Accounting Scandal Presented By: Jennifer Buondonno Nirmala David Robert Pufky Matt Rollings ENRON Page 1 of 27 Table of Contents Executive Summary†¦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‚¬ ¦..3 (I) Introduction to the Enron case and the organizations involved†¦Ã¢â‚¬ ¦. 5 Background information industry†¦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 Organizations and officers involved†¦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‚¬ ¦..6 Accounting firm and partners involved†¦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‚¬ ¦.8 Enron’s industry†¦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‚¬ ¦.. 9 Enron’s injured parties†¦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‚¬ ¦ 10 (II) Enron’s accounting fraud and misrepresentation†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 11 Explanation of the fraud†¦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‚¬ ¦. 11 Damages incurred†¦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‚¬ ¦12 Final outcome of the Case†¦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‚¬ ¦. 13 How the†¦show more content†¦Enron’s attempt to create a constellation of partnerships that would allow managers to shift debt and losses off of the books would soon fail. In Au gust of 2001, the now infamous internal whistle blower Sherron Watkins, formerly the Enron Vice President for corporate development, sent an 1 www.washingtonpost.com/wp-srv/business/enron/front.html ENRON Page 5 of 27 email to Kenneth Lay, warning him that Enron would â€Å"implode in a wave of accounting scandals †. CEO Jeffrey Skilling suddenly resigns, two months after the memo was sent to Lay. Enron, with the help of the Andersen Accounting firm, would lose control of their illegal attempt to conceal the debt and losses of the company. Ultimately, Enron would become bankrupt. This scandal is the one of America’s largest investigations into a firm’s illegal accounting practices and attempt to conceal it from the shareholders and credit lenders. Organizations and Officers Involved To unmask the Enron scandal and find out what really happened, several organizations and officers of Enron are working together. Among the organizations responsible for unfolding the Enron scandal are the United States Congress, US Department of Justice, IRS, Securities and Exchange Commission, and the United States penal system. Congress is now responsible for combing through thousands of documen ts and scheduling hearings in the court system. The US Department of Justice isShow MoreRelatedEnron Case1075 Words   |  5 PagesMINI CASE: THE FILURE OF CORPORATE GOVERNANCE AT ENRON 1.Which parts of the corporate governance system, internal and external, do you believe failed Enron the most? In the evaluation of the Enron’s case; by trying to see the very big picture, it is not only about that the internal part of the corporate governance system was failed or but also the external part of the corporate governance system was also failed. As noted on the last paragraph of the mini case, many people from different positionsRead MoreEnron Case1899 Words   |  8 PagesENRON CASE Please read the Enron cases posted on blackboard and the one in your book then answer the following questions based upon the case and Chapter 9. Make sure that your answers are supported by the facts of the case and the concepts you learned from Chapter 5. Please rely only on the case/chapter 9 to answer the questions except for question # 12—requires outside search. Make sure your answers are sufficiently brief, concise, and relevant to the question. Please avoid generalRead MoreEnron Case2186 Words   |  9 PagesPart B: What role did the CFO play in creating the problems that led to Enron’s financial problems? In order to prevent the losses from appearing on its financial statements, Enron used questionable accounting practices. To misrepresent its true financial condition, Andrew Fastow, the Enron’s CFO, takes his role involving unconsolidated partnerships and â€Å"special purpose entities†, which would later become known as the LJM partnership. Taking advantage from the SPEs’s main purpose, which providedRead MoreEnron Case2402 Words   |  10 Pages Imane Malihi Prof. Fred Friend BLW411/511 March 27, 2014 The Downfall of Enron Corporation â€Å"Ethics and integrity are at the core of sustainable long term success †¦ Without them, no strategy can work and, as Enron has demonstrated, enterprises will fail. That’s despite having some of the ‘smartest’ guys in the room.† by Richard Rudden. As the quotation states, ethics and integrity play a key role in the success of any corporation; through these principles, companies can ensure their complianceRead MoreThe Case Of The Enron Case Essay1197 Words   |  5 Pages1.1. One of the most important fraud cases in the USA was The Enron case because of his criminal activity which involved a big part of USA. Let me give a short introduce about it, â€Å"In 1974, Kenneth Lay joined the Florida Gas Company, eventually serving as president of its successor company, Continental Resources Company. In 1981, he left Continental to join Transco Energy Company in Houston, Texas. Three years later, Lay joined Houston Natural Gas Co. as chairman and CEO. The company merged withRead MoreENRON Case Study1572 Words   |  7 Pages1. The Enron debacle created what one public official reported was a â€Å"crisis of confidence† on the part of the public in the accounting profession. List the parties who you believe are most responsible for that crisis. Briefly justify each of your choices. Following parties are believed to be the most responsible for the crisis. With any big organization going so bad, the blame starts with the top level executives, there was no different in this case. For Enron the blame started with Enron’sRead MoreCase: 9 Enron928 Words   |  4 PagesCase 9: Enron; Questionable Accounting Leads to Collapse Bruce Smith Minnesota School of Business BS430 Business Ethics MR. Morris November 25, 2012 1. 2. 1. How did the corporate culture of Enron contribute to its bankruptcy? Effective leaders are good at getting followers to their common goals or objectives in the most effective and efficient way; unfortunately for Enron, in the end Ken Lay and Jeffery skilling were too focused on profits that nothing else mattered. In theRead MoreEnron Case2918 Words   |  12 Pagesseemed eliminate confidence by the business world about the practice of good corporate governance in the United States. Enron was a company that was ranked as seventh out of the five hundred leading companies in the United States and is the largest U.S. energy company that went bankrupt leaving debts amounting to nearly U.S. $ 31.2 billion. In instance with the case of Enron known occurrence of moral threat behavior such as manipulation of financial statements with a record 600 million dollar profitRead MoreEnron Case Study5921 Words   |  24 PagesEnron Case Study [pic] Part A: Problem Focused Analysis and Recommendations. 1. Brief Case Background. List key events, use timeline. Case Background At one time Enron was one of the world’s largest producers of natural gas, oil, and electricity. It also appeared to be one of the most profitable companies, taking shareholders from $19.10 in 1999 to $90.80 by the end of 2000. Enron’s top management answered to a Board of Directors whose responsibility was to question and challenge new partnershipsRead MoreThe Ethics Of The Enron Case1407 Words   |  6 PagesThe Enron case is a very popular case to show how the profession of accounting is vital to make the corporate world of business flow reliably. Enron was recognized as one of the world’s major electricity, natural gas, communications and pulp and paper’s company. However Enron was found to record assets and profits at inflated, fraudulent and non-existent amounts. Debts and losses were found to be excluded from financial statements along with other major transactions between Enron and other companies

Film Review The Hunting Ground - 849 Words

The film I watched was called The Hunting Ground this film started off very interesting. It showed clips of students finding out for the first time they got accepted to the university of their choice. Most of the students screamed of shock and it was obvious they were thrilled. Then a couple girls get interviewed about their experience their first months at that school, almost all of them had the perfect grades and perfect lives. However, these interviews take a twist when many girls getting interviewed start telling the story of when they got raped, there was also about three guys that were victims of this too. The weird part of it all was that more than half of them got raped by a friend or someone they knew for a while. Many of the victims didn’t know how to handle what had happened to them. If they spoke to friends they could be judged, and speaking to their parents was even worse. After a while of keeping that secret in many decided to go talk to someone in their universi ty office. In almost all of these cases, the person in the office starts questioning them about what they could of changed to avoid it etc. instead of helping them and taking care of this horrible problem. The people in the office ultimately say they will help, but several days pass and the victims don’t hear anything about them. The universities do it on purpose, the statistics show almost all universities never expel students for such thing. They do this to make their campus look safe and to not keepShow MoreRelatedSociology of Hunger Games1719 Words   |  7 Pagespoverty Peeta and Katniss are taken back by the surplus of luxury and wealth exhibited by the Capitol. The Games are held in an arena in a forested area. When they begin, Katniss rushes away from the excitement of the initial bloodbath and uses her hunting/survival skills to develop a strategy. She sleeps in trees and hunts game. 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But while Lenz fought back against a large corporation (she did not win the case, although her video was ruled

Analyzing And Exploring The Global City - 2530 Words

Danielle D’Amico Julia Miller Analyzing and Exploring the Global City: Sydney 3 July 2015 Research Paper Throughout the years, people from all over the world have migrated to Australia and the United States of America to create better lives for themselves such as escaping religious/political persecution, obtaining a better education, reuniting with their families, becoming exposed to more job opportunities, and various other reasons (Singer 2). Philadelphia, Pennsylvania in America and Sydney, New South Wales in Australia have similar immigration patterns, settlement trends, and impacts. However, the communities of immigrants tend to not follow the same behaviors in both cities. Immigration is vital for continuous economic and social growth. Thus, what impact does immigration have on these two cities? In 2011, Australia’s population was 26% migrants compared to America’s, which was only 13% (4102.0 - Australian Social Trends, 2014). 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Epidemiology and Prospective Observational

Question: Discuss about the Epidemiology and Prospective Observational. Answer: Introduction: The study design used in this study is prospective observational study. In this design, the author observed the nurses feeding patterns with relation to the risk of getting the type 2 diabetes mellitus (McKeown et al., 2002). The researcher then collected the information for a period of ten years using a detailed questionnaire with no influence to them. The use of this design enables the observation of some rare exposures to health since a researcher is able to identify a subject who developed a disease at some point. It is also possible to calculate the incidence of a disease which has been exposed to the subjects. The crude incidence rate is the number of new cases of diabetes mellitus that occurred in one year per one hundred thousand nurses under investigation. Therefore the incidence is arrived at by counting the number of new cases, divides by the total population under study and multiplied by one hundred thousand. Incidence rates for total grain Percentiles Counts Population Crude rate 1 392 144,698 270.9 2 356 144,403 246.5 3 368 144,438 254.8 4 358 144,471 247.8 5 405 144,409 280.5 Incidence rates for whole grain Percentiles Counts Population Crude rate 1 426 144,914 2934.0 2 391 147,351 265.4 3 407 143,856 282.9 4 320 145,133 220.5 5 335 144,164 232.4 Incidence rates for refined grain Percentiles Counts Population Crude rate 1 349 144,742 241.1 2 369 144,817 254.8 3 337 144,095 233.9 4 378 144,252 262.0 5 446 144,512 308.6 These results indicate that the crude rates were not consistent with the quintiles of meal consumption. Unadjusted incidence rate Percentiles Counts Population Crude rate 1 349 144,742 0.0024 2 369 144,817 0.0025 3 337 144,095 0.0023 4 378 144,252 0.0026 5 446 144,512 0.0031 The relative ratio of diabetes mellitus reduces with increasing quintile of whole grain. This means that the higher the amount of consumed whole grain, the lower the likelihood of diabetes mellitus type 2 occurring (de Munter et al., 2007). The physical form of the whole grain as well as its high content of the fibers makes them to be digested slowly. Moreover, the low rate of whole grains absorption makes it to have low glycemic levels. The consumption of foods which have low levels of glycemia is linked to low glycosylates hemoglobin excretion. The finely ground fibers cannot produce glucose response to the postprandial blood. The adjustment of other factors were meant to determine whether there were other factors apart from the composition of meals that were linked to type 2 diabetes. Physical activity for instance is linked to a reduction of the blood glucose levels. This is because during exercises, the muscles use glucose in blood to derive energy. In case an individual is resistant to insulin, physical activities lower the resistance making cells to take up glucose effectively (He et al., 2010). Family history is also linked to diabetes as a result of inheritance of genes for diabetes type 2. Smoking causes damage to the blood vessels complicating the diabetes. The biasness in this diabetes type 2 studies among the nurses is the assumption that nurses are closer to the medical care and hence access to treatments. In some instances, the nurses offer services to the patients such that they do not remember that they too need medical services (Egger and Smith, 1998). Moreover, the nurses may have the fear of being stigmatized by their colleagues and escape treatment or diagnosis. The association of diabetes type 2 with other factors apart from the whole grain meal does not have a clear cut line. The study did not include males to determine the effect of gender differences to type 2 diabetes (Fung et al., 2002). Fat intake Control Study cases High 100 80 Moderate 270 270 Low 130 150 For the control and study groups, there was low number of skin cancer cases i.e. 100 and 80 respectively. On the other hand, for the control and study groups the low fat intake there were high number of skin cancer cases i.e. 130 and 150 respectively. However, moderate intake of fats resulted had similar number of skin cancers of 270. The low number of skin cancer in high fats intake is because the fats raise the prostaglandin E2 levels which function as T cell function immunoregulators and in turn lower the ultraviolet related skin cancers. Relative risk= the number of subject with a positive or bad outcome divided by the sum of the number of subject with bad and good outcomes in the case study. This figure obtained is then divided by the number of subjects with a positive or bad outcome divided by the sum of the number of subject with bad and good outcomes in the control group. 150/230 divided by 130/230 =0.65/0.57 Relative risk=1.14 This means that the people who take fats in low levels would be approximately 1.14 more times likely to develop skin cancer as compared to those who take high fat levels. Relative risk=1.3 This means that the people who take fats in moderate levels would be approximately 1.30 more times likely to develop skin cancer as compared to those who take high fat levels (Prochaska et al., 2005). The association between the parenchymal cells and low fats intake is that low fats intake increases the risk of skin cancer (Black et al., 1995). On the other hand, high fats intake leads to oxidative stress and increase in the number of cytokines responsible for inflammation while at the same time reducing the death of skin cells via apoptosis. The exposure to low fats leads to melanoma because the skin cells are not able to counter the effects of oxidative damage. In the long run the skin cells begin dividing uncontrollably leading to the cancer of the skin. There is no association between rare exposure and development of a disease. This is because there when there is a rare exposure, sixty people develop the disease while one hundred and eighty of them do not. On the other hand when there is no exposure, the same effect is observed as when there is a rare exposure. Relative risk in younger adults 30/30+90 divided by 40/40+80 = 0.76 Relative risk in older adults 40/120 divided by 30/120 =1.32 The relative risk of 0.76 observed in the younger adults means that the people who are exposed to a disease are about 0.76 times less likely to develop a disease as compared to those who have been exposed. The relative ratio of 1.32 in the older adults indicates that the older exposed adults are about 1.32 times more likely to develop a disease when they are exposed than those who are not exposed. Bias in cohort studies can occur especially in the process of making of a selection of the study subjects. This means that the selection method is based on the exposure as well as the outcomes of the exposure (Greenland, 1977). In some cases, it can be easy to view the relationship between exposure and selection of subjects. However, it is difficult for the researcher to determine how the awareness of an outcome can influence the outcomes of a study. For instance in a study to determine the effects of the emission of some chemicals like sulfur to the people for a period of seven years, there were beliefs that employees who worked in that factory were the most affected. However, there was no data to support this assumption. At the time of enrollment, the health records which existed by then were used while many of the old records had been misplaced or lost. Therefore there was a likelihood of either underestimation or overestimation of the association between exposure to sulfur and disease development. Occurs when the subjects selected for the control are not a true representative of the population hence cannot estimate the distribution of exposure. case Controls Exposed 5 8 unexposed 4 54 On the other hand, taking two hypothetical situations, the researchers chose similar controls which had a high probability of having the exposure as shown below. Case Controls Exposed 5 14 unexposed 4 48 The loss of some participants during a follow up represents data biasness in a study. This is because there is an introduction of a deviation in the observed values during follow up as compared to the observation if all the subjects were present. In some cases, the loss of participants by about five percent is acceptable but more losses are likely to cause alarm because they have a different prognosis as compared to those who make it to the follow up. In the end, the validity and accuracy of the study is not acceptable in this study. As a result of this, the researchers do their best to lower the number of loss of participants during follow ups. Such measures include maintaining regular contacts by making calls or sending emails, maintaining baseline information which enables them to track the subjects easily and using the participants who are easy to track. 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