Enron Questionable Transactions

Topics: Enron, Enron scandal, Stock Pages: 3 (761 words) Published: October 2, 2011
Enron Questionable Transactions

Question 1
The question which segment of its operations got Enron into difficulties is simple to answer, everything. Almost every all segments of their operation were improper. First of all, they practice unethical and dishonest practices which victimized workers, consumers, taxpayers and stockholders. Enron created partnerships within their own organization which led to them creating new financial instruments, called SPE’s (special purpose entities) which was used to falsify the accounting. The improper financial reporting was to make the company look good, instead of assuring that the figures are accurate and reliable. Enron's legal department wrote up contracts that were irregular. Enron executives were so focused on the pursuit of profits, regardless of economic fundamentals. Enron had excesses of difficulties and they also cause their law firm and accounting firm to become involved in a web of dishonesty.

Question 3
All of Enron’s directors were involved in the dishonest scheme and they understood how profits were not honorable. One of the directors, Andrew Fastow who was responsible in creating many of the partnerships such as JEDI, Chewco, Kopper & Dodson’s and Dodson Companies knew exactly how the profits were being made along with several other directors such as Ben F. Glisan, Jr., Jeffrey K. Skillings who was on the board of directors. These directors were all part of a financial scheme to continue to gain profit internally without the other board of directors’ knowledge and their shareholders. Almost every transaction that took place within Enron Andrew Fastow would say he had approval from Jeffrey K. Skillings the CEO.

Question 5
Ken Lay was not fully made aware of many of these transactions for profit and he was not informed of all the partnerships that were developing within the company he founded, he trusted his f finance team would operate in an ethical manner. He was not a person who had the...
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