Enron
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- Category: Politics
- Date Submitted: 07/02/2012 04:36 PM
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Enron
Tiffany Sue Eubanks
LDR 531
January 23, 2012
Michael Giuliano
Enron
Enron was introduced in 1985 with merging Houston Natural gas and InterNorth. The company consisted of selling natural gas pipelines in the United States. They soon became the largest natural gas seller in the North American region by 1992.(Berenson, A & Oppel, R. Jr.) Enron continued to help their company to grow by trade of natural gas across the globe. Because of the rapid grow and size of the company the numbers of the company became poorly reported. The financial advisors of Enron hide billions in debt from the chief financial officers and other directors. They hide the issues of failed deals and projects from the Enron board.(Barringer, Felicity) Shareholders lost 11 billion and stoke holder share when from $90 a share to $1 in a year’s span. Many issues could have been resolved if the management of Enron was different.
One way that managers contributed to the fall of Enron was by the reckless use of derivatives and special purpose entitles. Because of the lack of research established on these entitles, the financial committee was unorganized on the accounts and the direction to take. The improper usage of the entitles and the way the employees practiced the accounts made the committee unorganized. Also a failure that effected the company was the way they showed favoritism to the auditor. He was not only the auditor but the consultant for company. This caused a conflict of interest and was questioned saying is a reckless standard for the organization.(Barringer, Felicity) The auditor was being too pressured by the company and to be a consultant also brought issues to the table. Enron then begin placing the company into a snowball effect. This consisted of them booking the cost of cancelled projects as assets to the corporation. Nothing was officiated as being canceled either so the company when from 90 million under to 200 million under in a matter of a...
Tiffany Sue Eubanks
LDR 531
January 23, 2012
Michael Giuliano
Enron
Enron was introduced in 1985 with merging Houston Natural gas and InterNorth. The company consisted of selling natural gas pipelines in the United States. They soon became the largest natural gas seller in the North American region by 1992.(Berenson, A & Oppel, R. Jr.) Enron continued to help their company to grow by trade of natural gas across the globe. Because of the rapid grow and size of the company the numbers of the company became poorly reported. The financial advisors of Enron hide billions in debt from the chief financial officers and other directors. They hide the issues of failed deals and projects from the Enron board.(Barringer, Felicity) Shareholders lost 11 billion and stoke holder share when from $90 a share to $1 in a year’s span. Many issues could have been resolved if the management of Enron was different.
One way that managers contributed to the fall of Enron was by the reckless use of derivatives and special purpose entitles. Because of the lack of research established on these entitles, the financial committee was unorganized on the accounts and the direction to take. The improper usage of the entitles and the way the employees practiced the accounts made the committee unorganized. Also a failure that effected the company was the way they showed favoritism to the auditor. He was not only the auditor but the consultant for company. This caused a conflict of interest and was questioned saying is a reckless standard for the organization.(Barringer, Felicity) The auditor was being too pressured by the company and to be a consultant also brought issues to the table. Enron then begin placing the company into a snowball effect. This consisted of them booking the cost of cancelled projects as assets to the corporation. Nothing was officiated as being canceled either so the company when from 90 million under to 200 million under in a matter of a...