Enron’s stock was valued at $90 per share in 2001 and was worth almost nothing at the end of the same year. The downward spiral that began since Enron’s accounting fraud was exposed affected all their shareholders and employees. Billions of dollars were lost and thousands of jobs were mislaid. After Enron’s fall, the US authorities have analyzed the situation and have attempted at undoing the wrong in a variety of
It was seen as a catastrophe to investors and employees when Enron filed for bankruptcy in December 2001. Their shares dropped from $90 to just pennies. This was the result of many of Enron’s losses that were not reported in the financial statements. The executives faced an ethical dilemma because they knew about the accounts that were hiding losses. The Board The board is the recipient of the shareholders and people and it is their responsibility that correct decisions are made and that the law is being followed.
1. Enron Corporation was an American energy company in Houston, Texas. In 2001, it was revealed that it reported financial condition was substantial by planned accounting fraud of Enron scandal. The scandal brought into the question of the accounting practices and activities of many corporation in the U.S affected the greater business world. 2.
Arthur Levitt, former chairman of SEC, stated “I think the Enron scandal is symptomatic of something much broader than Enron. I think it's symptomatic of a breakdown of the ethical values of business over a period of perhaps 20 years, a gradual erosion of business ethics that brought us to an Enron, but might very well bring us to a whole host of Enrons as we move down the road.” This does seem to be a much larger problem then the collapse itself. Their unethical ways cost Americans millions of dollars, and some their life savings. At first it seemed as though the Kenneth Lay let his pride get in the way of admitting his company was going down but the further you get into the details it was all about the money. With their way of doing Market to market account it made them look as though they were making money when in fact they were
Workers in Enron were being supported to think out of the box and being creative. They were also allowed to break the rules and increase the value of company although there was no cash generated. Soon, many employees in the company started to use this method to cover and hide losses. Without anyone knowing the company was losing money, they did not have to bear the consequences and responsible for their mistakes. The integrity of Enron was contaminated as a result end up if anyone did mistakes and no one finds out, keep quiet.
Gerald Ford shouldn’t of let him get away with it. Nixon committed a huge crime and should have to suffer the consequences. Another thing I do not understand is how he did not get punished or was not forced to give away the tapes. Nixon’s abuse of presidential power had a long-lasting effect on American political life. This created an atmosphere of cynicism and distrust.
Solution:- Lou Pai is basically a real mystery man in the Enron scandal. He was a former executive of the energy trading firm. He was very money minded and did so many frauds in the company .he cashed in an estimated $270 million in stock and then left the company before it collapsed. The Enron executive who went away from the company with the almost money has hardly been mentioned during the trial. Lou Pai made more money and fraud compared toL ay or Skilling.
Enron formed by merger: ENRON formed by a merger between houstan natural gass an omaha based internorth . Kenneth Lay, who had been the (CEO) of Houston Natural Gas, became Enron 's CEO , and quickly makes Enron into an energy trader and supplier. Enron Named America 's Most Innovative Company: By 1993, Enron had a number of limited liability special purpose entities that allowed Enron to hide its liabilities while growing its stock price. Enron 's stock price, which hit a high of United states $90 per share in mid 2000, caused shareholders to lose nearly $11 billion when it plummeted to less than $1 by the end of November 2001. Analysts were criticizing Enron for "swimming in debt," but the company continued to grow developing a large network of natural gas pipelines, and eventually moving into the pulp and paper and water
It is observed by researches and analysts that unethical business and accounting decision has took place in Enron Company especially CFO Jeffrey Skilling and CEO Ken Lay who played major roles in this scandal. Enron involved in business risks like fraud and the company failure happened when it entered into conservative transactions. The problem Enron faced was that they treated their loans as revenues yet it is not shown in the balance sheet, in other words, Enron did not treat them as current liabilities such as accounts payable so they did not show their creditors as liabilities, which had mislead their customers and investors. Because the company had taken the help from others in hiding a large amount of company debt (partnerships with various enterprises), it shows that unethical actions had been carry out. For example, Enron did
In this Enron Scandal ,several moral issues and values are being discussed .The moral issues is the misconduct of code of ethics by management level of a corporation , violation of code of professional ,ethical dilemma that faced by a management level when involved own interest . The first moral issues that discussed in Enron Scandal is misconduct code of ethics by management level of a corporation .In this case ,the mastermind of this scandal is the company CEO , Mr . Kenneth Lay, Mr. Jeffrey Skilling and the company CFO,Mr. Andrew Fastow .The management level of Enron Corporation had misconduct the code of ethics and fail to performing the duties of a corporation which is telling the truth of the situation of a corporation .Instead , they tried try to hide the truth of their financial status and create a false prosperity situation and make the public believe on them in order to support their shares prices . The misconduct of code of ethics by the management level by Enron corporation has led to the another question – The ultimate responsibility of a corporation towards society ?