Topics: Enron, Kenneth Lay, Andrew Fastow Pages: 2 (471 words) Published: December 15, 2012
Enron: The Smartest Guys in the Room
Extra Credit for Accounting II
By: Grace Lindley

ENRON: The Smartest Guys in the Room is the story of one of history’s greatest business scandals, in which top executives of America’s seventh largest company walked away with over one billion dollars while investors and employees lost everything. Based on the best-selling book The Smartest Guys in the Room by Fortune reporters Bethany McLean and Peter Elkind, and featuring insider accounts and incendiary corporate audio and videotapes, this tale of greed, hubris and betrayal reveals the outrageous personal excesses of the Enron hierarchy and the moral vacuum that led CEO Ken Lay—along with other players including accounting firm Arthur Andersen, Chief Operating Officer Jeffrey Skilling and Chief Financial Officer Andy Fastow—to manipulate securities trading, bluff the balance sheets and deceive investors. The film comes to a harrowing climax as I hear Enron traders’ own voices as they wring hundreds of millions of dollars in profits out of the California energy crisis. As a result, I come to understand how the avarice of Enron’s traders and their bosses had a shocking and profound domino effect that may shape the face of our economy for years to come. The story begins in 1985, with the merger of Houston Natural Gas and Omaha, Nebraska’s natural gas company, InterNorth, to form the natural gas pipeline company called Enron. By 2000, the company has grown into the largest natural gas merchant in North America, eventually branching out into trading other commodities, such as water, coal and steel. As the pioneer behind this strategy to switch from a pipeline company to trading, Jeff Skilling is named CEO, and the company stock skyrockets. While Skilling’s “black box” accounting results in declared earnings of 53 million dollars for a collapsing deal that doesn’t profit a cent. And Enron’s West Coast power desk has its most profitable month ever, as...
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