The Enron Scandal One of the most popular business bankruptcies and collapses known to date is that of the Enron Corporation. Enron, once known as "America 's Most Innovative Company" by Fortune Magazine six straight years from 1996 to 2001. Enron seemed to be doing very well until the summer of 2001 generating a lot of cash and new businesses, but in October of 2001 Enron was forced to disclose that their accounting practices had been very creative, and failed to follow generally accepted accounting principles. Profits that had been soaring sky high were wiped away and replaced with enormous losses and charges that were never recorded properly. Unfortunately, Enron executives who were responsible for the shady accounting practices, were able to escape this debt by selling off most or all of their shares in the company (valued at over 10 million dollars) before the stock price fell greatly. They also froze employee 's pension plans, and many people lost their jobs in the wake of the collapse and found out their retirement was history (Anonymous, 2002). For five straight years Enron had investors and shareholders believe that everything was fine in the corporation with their creative bookkeeping. External and Internal agencies that should have found the problems in the accounting practices did not do so until it was painfully obvious to all of America. Now, as America lies in the wake of the Enron scandal, the Securities and Exchange Commission has tightened its grip on accounting practices for all corporations and with the Public Company Accounting Reform and Investor Protection Act of 2002 they can keep a close eye on all financial reporting. It isn 't completely in the fault of Enron; through millions of dollars of donations to political legislation, Enron was able to deregulate the energy industry, which removed all of the government oversights on energy. Without these government oversights Enron could do as they pleased and is the reason why they
Cited: Lindstrom, Diane. "Enron Scandal." Microsoft Encarta Online Encyclopedia (2004): 29 pars. 9 Dec 2004 .
Anonymous. "BBC News | In Depth | Enron." BBC News (Feb 2002): 9 Dec 2004 .
Gutman, Huck. "Enron Scandal: The Long, Winding Trail." Common Dreams News Center (Feb 2002): 24 pars. 9 Dec 2004