How would you characterize Enron's corporate culture?

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1. Which segment of its operations got Enron into difficulties? The segment of its operations that got Enron into trouble was Kopper and Dodson creating a series of limited partnerships and limited companies through which to operate their interests, but Kopper had no outside investor at risk. 3. Did Enron’s directors understand how profits were being made in this segment? Why or why not? I do not think Enron’s directors understood how profits were being made in this segment. They were unable to rely on the information they were receiving or on Enron’s company policies being followed. Management was out of control. 5. Ken Lay was the chair of the board and the CEO for much of the time. How did this probably contribute to the lack of proper governance? The CEO should have knowledge of what is going on with his business at all times. They should get a report of the company’s revenue daily, and Ken Lay should have noticed that the revenue was overstated. 6. What aspects of the Enron governance system failed to work properly, and why? The aspect of the Enron governance system that failed to work properly was the accounting firm. Their primary function was to assure that the company was accurately and completely disclosing its financial results and condition. 9. Identify conflicts of interests in:

• SPE activities- Enron used several SPE’s to hide debt and overstate equity and earnings • Arthur Andersen’s activities- Management got the idea for some of their most creative schemes from the consulting department of Arthur Andersen, meanwhile the accounting department was also responsible for preparing Enron’s audited financial statements. • Executive activities
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