The Enron Scandal
Table of Contents
Title Page 1. Introduction 2 2. History 3 a. Formation 3 b. Operations 3 c. The Success 4 d. All that glitters is not gold 4 e. The Fraud 4 3. Products 5 4. Enron Scandal – The Company Fraud 8 f. What Happed? 8 5. Techniques used in the Company Fraud 9 g. Revenue Recognition 9 h. Mark-to-market accounting 9 i. Special Purpose Entities 10 j. Executive Compensation 11 k. Risk Management 11 l. Financial Audit 12 m. Audit Committee 12 n. Other Accounting Procedures 13 6. Bankruptcy 14 o. Change in Stock Price 14 7. Post-Bankruptcy 15
ENRON SCANDAL
Introduction
The Enron scandal is the name given to financial scandal Enron Corporation, an American energy company was involved in. the scandal eventually led the company to bankruptcy and the dissolution of Arthur Andersen, which was one of the five largest audit and accountancy partnerships in the world. This was the largest bankruptcy reorganization in American history at that time in 2001 and Enron was also accredited as the biggest audit failure.
Enron Corporation was an American energy, commodities, and Services Company based in Houston, Texas. Before its bankruptcy on December 2001, Enron was one of the world's leading electricity, natural gas, communications, and pulp and paper companies, with claimed revenues of nearly $101 billion in 2000. Fortune named Enron "America's Most Innovative Company" for six consecutive years. At the end of 2001, it was revealed that it’s reported financial condition was sustained substantially by institutionalized, systematic, and creatively planned accounting fraud, known as the "Enron scandal". Enron has since become famous for wilful corporate fraud and corruption. The scandal led
Title Page 1. Introduction 2 2. History 3 a. Formation 3 b. Operations 3 c. The Success 4 d. All that glitters is not gold 4 e. The Fraud 4 3. Products 5 4. Enron Scandal – The Company Fraud 8 f. What Happed? 8 5. Techniques used in the Company Fraud 9 g. Revenue Recognition 9 h. Mark-to-market accounting 9 i. Special Purpose Entities 10 j. Executive Compensation 11 k. Risk Management 11 l. Financial Audit 12 m. Audit Committee 12 n. Other Accounting Procedures 13 6. Bankruptcy 14 o. Change in Stock Price 14 7. Post-Bankruptcy 15
ENRON SCANDAL
Introduction
The Enron scandal is the name given to financial scandal Enron Corporation, an American energy company was involved in. the scandal eventually led the company to bankruptcy and the dissolution of Arthur Andersen, which was one of the five largest audit and accountancy partnerships in the world. This was the largest bankruptcy reorganization in American history at that time in 2001 and Enron was also accredited as the biggest audit failure.
Enron Corporation was an American energy, commodities, and Services Company based in Houston, Texas. Before its bankruptcy on December 2001, Enron was one of the world's leading electricity, natural gas, communications, and pulp and paper companies, with claimed revenues of nearly $101 billion in 2000. Fortune named Enron "America's Most Innovative Company" for six consecutive years. At the end of 2001, it was revealed that it’s reported financial condition was sustained substantially by institutionalized, systematic, and creatively planned accounting fraud, known as the "Enron scandal". Enron has since become famous for wilful corporate fraud and corruption. The scandal led