Smartest Guys In The Room

Submitted By taswani
Words: 346
Pages: 2
Open Document
Tarun Aswani

Smartest Guys in the Room Essay

The Enron scandal took a toll not only on the victims within the corporation, but on business and ethical operating procedures in general. At first, this scandal being with suspicious trading on oil market stocks. Enron founder, Ken Lay, wholeheartedly denies knowledge of these gradings after Enron’s reserve funds are depleted. This was the beginning on a slippery slope of wrongdoings by Lay. To cover up for himself, he cleared house of the illegal traders and hired a new CEO in Jeff Skilling. With this I believe that Lay was trying to outsmart the employees, investors, and auditors into thinking that the illegal threat was now removed and with the new hire of Skilling, Enron would be able to redeem itself. In retrospect, the hire of Skilling further regressed Enron from being an ethical and profitable company. The illegal accounting practices ad Darwinian corporate environment led to the beliefs that anything and everything make outsiders believe Enron was profitable was fair game. This mentality leads to aggressive investments in failing business such as broadband technologies and trading weather commodities. However, due to Skilling illegal accounting practices, Enron still shows profits, which are actually nonexistent. In our earnings management handout we can relate this information of accounting manipulation back to the Enron scandal in the Smartest Guys in the Room. In the simplest forms of manipulation,
Show More

Related Documents: Smartest Guys In The Room

Essay on Ethics and Enron

Ethical issues: Enron’s collapse In the past, Enron was one of the world's major electricity, natural gas, communication, services, and paper companies. It is a truth that Enron was one of the America's most innovative companies in the past six consecutive years. Until 2001, it claimed that it had nearly $101 billion revenues. However, Enron Corporation announced its collapse on December 2, 2001. To be honest, it was a biggest bankruptcy in U.S. history. In the public, most of people think that…

Words 988 - Pages 4

Essay about Week 1 Case Study Enron AC503

Enron Scandal Brenda Harris AC503 June 21, 2014 Louis Beaubien Enron Scandal Introduction The main function of the audit profession is to provide true and fair views of the financial statements. There are many people who depend on the information provided by the auditors including government officials, investors and management for the company. If the company's information is misstated, overstated, or fraudulent in nature, it does not just affect the company but any third-party or government…

Words 913 - Pages 4

Research Project Paper

The Downfall of Arthur Andersen Brittny Thomason Henderson State University ACC 5113-Advanced Auditing Arthur Andersen Arthur Andersen was one of the “Big Five” accounting firms until its’ horrible downfall with Enron. In 2002 it decided to voluntarily give up its license to practice as Certified Public Accountants (CPA’s) in the States. The company was based in Chicago, Illinois and still resides there today even though after twelve years they have still not returned even close to their…

Words 2665 - Pages 11

Essay about Assignment: Internal Control and Fraud

audit for Worldcom, a leading telecommunications company built from over 70 acquisitions, unraveled the accounting manipulations where the key aspect is that corporate accounting team used creative accounting treatment by transferring the normal operating expenses to the balance sheet as an asset in order to misrepresent profit figure. Further investigation reveals that there is also inflating revenues with bogus accounting entries from "corporate unallocated revenue accounts". This means Worldcom…

Words 3042 - Pages 13

Essay on Internal Controls

of stock. You will also read about some elements of internal controls. INTERNAL CONTROLS 3. Internal control is a plan of organization and all the different methods and procedures used by a business to help the company monitor its assets. Internal control can also prevent fraud and help the company eliminate errors. It is a system designed to correct errors and ensure that all manager policies are followed. There…

Words 1040 - Pages 5

Essay on Business Ethics

forty years old; but in general is as old as trade itself. In this paper, the following aspects of ethics will be discussed: Ethical issues faced in business; recent trends in business ethics; international considerations in business ethics; quantitative techniques and ethics.…

Words 1442 - Pages 6

The Sarbanes-Oxley Act Of 2002

was designed to mandate many reforms in order to require greater corporate responsibility, disclosure, transparency, and to combat against accounting fraud. In response to several corporate and accounting scandals happening at that time, such as Enron, WorldCom, and Peregrine Systems, which cost investors billions of dollars when stock prices plummeted and the affected companies went out of business, the Sarbanes-Oxley Act was signed into law, (Kimmel, 2011, p.8). The Act was passed in order to…

Words 2815 - Pages 12

Assignment Essay

associated with Fannie Mae, Freddie Mac, Alcoa, Enron, HIH, Merck, Lehman Brothers, Parmalat, Union Carbide and WorldCom, have not only contributed to global financial crises. They have also raised questions about the quality of corporate leadership and ethics, and damaged the psychological relationships between such companies and their multiple stakeholders. Studies of such scandals and…

Words 2063 - Pages 9

Essay on Gay Marriage

Solutions for Chapter 1 True/False Questions 1-1 T 1-2 T 1-3 F 1-4 F 1-5 F 1-6 F 1-7 T 1-8 T 1-9 T 1-10 F 1-11 T 1-12 T Multiple Choice Questions 1-13 B 1-14 B 1-15 E 1-16 E 1-17 D 1-18 D 1-19 C 1-20 A 1-21 A 1-22 B 1-23 E 1-24 C Review and Short Case Questions 1-25 The objective of external auditing is to provide opinions on the reliability of the financial statements and, as part of an integrated audit, provide opinions on internal control effectiveness…

Words 5939 - Pages 24

Analyse the Problem of Accounting Fraud in a Listed Company and Evaluate Possible Solutions Essay

Analyse the problem of accounting fraud in a listed company and evaluate possible solutions In 2001, Enron Corporation went into bankruptcy due to the disclosure of false information in its financial statements. Similarly, when Lehman Brothers collapsed there was no evidence that it had ever publicly disclosed certain detrimental accounting information. Cases of accounting fraud such as these have become increasingly serious. Accounting fraud can result in creditors and stockholders losing confidence…

Words 1770 - Pages 8