Enron Accounting Scandal
Enron was originally a pipeline company in Houston, Texas in 1985. Enron became a company that was able to profit by providing deliveries of gas to utility companies and businesses. As the deregulation of electric power rose, Enron diversified the business and entered into an energy broker, which traded electricity and other types of commodities.
Enron employed several highly qualified PHDs in mathematics, physics, and economics. Enron continued to enter into contracts with customers and utilized a group of skilled employees to interpret, manage, and confine the high risks Enron was taking. Enron’s attempt to create a collection of partners that would permit employees to shift debt and losses off of the books would soon come to an end. With the help from Andersen Accounting firm, Enron would lose control of their illegal attempt to contain the debt and loss of the company. Ultimately, Enron became bankrupt, and the scandal was one of Americas largest accounting investigations into a firms illegal accounting practices and their attempt to conceal it from the shareholders and credit lenders. Divulging themselves into the scandal and solving the problems at hand are several organizations such as: United States Congress, US Department of Justice, IRS, Securities and Exchange Commission, and the United States Penal System. Each organization is handling a different approach to unfolding the scandal. The different aspects are scheduling hearings in court to bring about the scandal, investigating Enron’s defrauding of investors, examining the accounting practices performed by Arthur Andersen, and the alleged shredding of important financial documents. Citigroup, Morgan Chase, Andersen Accounting, and Enron are the organizations that were involved in the fraudulent activity. Citigroup and Morgan Chase are the companies that were responsible for providing the funds needed to commit the fraud. While Andersen and Enron shredded financial documents that would
Enron employed several highly qualified PHDs in mathematics, physics, and economics. Enron continued to enter into contracts with customers and utilized a group of skilled employees to interpret, manage, and confine the high risks Enron was taking. Enron’s attempt to create a collection of partners that would permit employees to shift debt and losses off of the books would soon come to an end. With the help from Andersen Accounting firm, Enron would lose control of their illegal attempt to contain the debt and loss of the company. Ultimately, Enron became bankrupt, and the scandal was one of Americas largest accounting investigations into a firms illegal accounting practices and their attempt to conceal it from the shareholders and credit lenders. Divulging themselves into the scandal and solving the problems at hand are several organizations such as: United States Congress, US Department of Justice, IRS, Securities and Exchange Commission, and the United States Penal System. Each organization is handling a different approach to unfolding the scandal. The different aspects are scheduling hearings in court to bring about the scandal, investigating Enron’s defrauding of investors, examining the accounting practices performed by Arthur Andersen, and the alleged shredding of important financial documents. Citigroup, Morgan Chase, Andersen Accounting, and Enron are the organizations that were involved in the fraudulent activity. Citigroup and Morgan Chase are the companies that were responsible for providing the funds needed to commit the fraud. While Andersen and Enron shredded financial documents that would
Cited: CNN Law. “Lawmakers blast Enron 's 'culture of corporate corruption ' Central News Network. February 3, 2002.” <http://archives.cnn.com/2002/LAW/02/03/enron/> Enron. Enron Annual Report 2000. Houston Tx. 2001. www.enron.com/corp/investors/annuals/2000/ar2000.pdf Flowler, To m. “Enron adds up 4 years of errors.” Houston Chronicle. January 17, 2002. <www.chron.com/cs/CDA/story.hts/special/enron/1125793> Kay, Joseph. “Citigroup, Morgan Chase fined for Enron deals: corruption at the heights of American finance” World Socialist Web Site. August 5, 2003. http://www.wsws.org/articles/2003/aug2003/enrn-a05.shtml