Enron brings to mind the collapse of the seventh largest company in the United States of America and the largest bankruptcy seen by the country till date. Billions of dollars were lost and thousands of jobs were mislaid. Following this debacle, the US authorities have analyzed the situation and have attempted at undoing the wrong in a variety of ways. We will summarize the efforts made by the US authorities in rectifying the discrepancies in the regulations of business practices in corporate America.
Accounting scandals are political or business scandals which arise with the disclosure of financial misdeeds by trusted executives of corporations or governments. These days, not too often, these scandals are splashed as headlines across media. Because there are complex groups of stakeholders who might be seriously affected by the scandals. Enron scam was the most remarkable scandal in 20 centuries by their institutionalized, systematic, and creatively planned accounting fraud. The scandal also brought into question the accounting practices and activities of many corporations in the United States. The scandal also affected the greater business world by causing the dissolution of the Arthur Andersen accounting company. This report will reveal the whole story of Enron scam and auditors role from the situation in more depth.
Accounting fraud is a term that to refers to the manipulation of the financial statements of a business organization with the intention of misleading the public and other stakeholders on the financial status and health of the organization. Accounting fraud can be committed either for the intention of giving investors and potential investors a positive image so that they can invest or give the government a negative image of the financial health of an organization so that the organization can be able to evade. One of the most discussed cases of accounting fraud is the Enron Scandal. This paper evaluates Enron Scandal with a focus on the factors that qualify it as a case of accounting fraud, proof of cooperate governance failure, and the ethical issues that were involved. Enron Corporation was an American company that specialized in energy and was based in Texas.
You lose your money just because a company cheated and stole your money. This is what the Enron scandal did to thousands of people. It could have been stopped if more forensic accountants in the world are checking on the companies. Forensic accountants are in. The fact of the matter is, it is very relevant to young professionals today.