Enron: The Smartest Guys In Essay

Length: 5 pages Sources: 3 Subject: Accounting Type: Essay Paper: #16333405 Related Topics: T Mobile, Verizon Wireless, Auditing, Audit
Excerpt from Essay :

Accordingly, arrogance is the only word to describe such a goof.

KPMG served as the independent audit firm of several of the largest sub-prime mortgage lenders. Identify the advantage and disadvantages of a heavy concentration of audit clients in one industry or sub-industry.

Citation: Danos, Paul. Eichenseher, John W. "Audit Industry Dynamics: Factors Affecting Changes in Client Industry Market Shares. Journal of Accounting Research." Institute of Professional Accounting. JSTOR.ORG. Vol. 20. No 2. Part II. Autumn 1982.

Full Citation (as posted in Jstor):

Audit Industry Dynamics: Factors Affecting Changes in Client-Industry Market Shares: Paul Danos and John W. Eichenseher. Journal of Accounting Research. Vol. 20, No. 2, Part II (Autumn 1982), pp. 604-616 (article consists of 13 pages). Published by: Blackwell Publishing on behalf of Accounting Research Center, Booth School of Business, University of Chicago

Stable URL:http://www.jstor.org/stable/2490888

The advantages and disadvantages of a heavy concentration of audit clients in one industry or sub-industry:

From Audit Industry Dynamics: Factors Affecting Changes in Client Industry Market Shares. Journal of Accounting Research, "[d]uring the past decade, the structure of the market for public accounting services -- particularly audit services -- has received scrutiny from regulators, practitioners, and researchers. A major focus has been on supplier (audit firm) size, and especially on the large shares of markets held by a subset of firms called the Big Eight." Rather, a means by which one might perceive this subset of firms.

"One hypothesis is that the Big Eight function as a cartel and charge higher than competitively warranted fees." Okay then, what about at&T or Verizon or T-Mobile or Sprint? Other than telephone companies, what about Dish, Comcast, or Clear Wireless? Why can these companies such unwarranted "hidden costs," whereas other companies cannot? Marketing within the United States is unscrupulous and deceitful. "... The Big Eight as a group tended to charge lower fees than non-Big Eight firms." This, too, is far more common in U.S. corporate marketing schemes than not. Rather, this commonality is what differentiates successful corporations from corporations and companies alike...

...

Hey, how about political endorsements and the perception of "Political Corruption" versus the perception of "Political Servitude"? That all falls under the same protective / protected umbrella.

The meaning of this illustration between the corrupt downfall of Enron, the fraudulent intents or deception employed by at&T, Verizon, T-Mobile, Sprint, Dish, Comcast, and Clear Wireless, and the perception of "... The Big Eight as a group tended to charge lower fees than non-Big Eight firms" is to showcase the hypocritical sense of the legalities enacted within the United States. Why is this seen as dishonest or fraudulent or deceptive / deceitful, when that is seen as a standard, or as traditional, or as a regular practice? Bill Gates -- who steals the progressive ideas and formats the framework slightly differently, then saturates the market with his cheaply made renditions -- is praised as a brilliant marketing genius, whereas Steve Jobs and Steve Wozniak are understood as merely the initial producers or idealistic manufacturers? Legalities with the United States are, then, absolutely a matter of perceptions and therefore shady.

From "Subprime Lending Risks" (of Bear Stearns Companies, BSC, from Wikinvest):

Subprime lending refers to the practice of extending credit or loans to borrowers who fail to qualify for prime or market rates due to their less-than-optimal credit scores. The interest rates associated with subprime loans are typically much higher than those associated with prime loans; the rationale is that borrowers with lower credit scores present a higher risk of default and must therefore pay a considerable risk premium. Subprime borrowers can be extremely sensitive to interest rates. As rates rise these borrowers, many of whom have adjustable-rate mortgages, find themselves unable to meet their debt obligations.

Investment banks such as Bear Stearns generate profit by bundling subprime mortgages and reselling them to other investors in the form of asset-backed securities. As the number of defaults among subprime borrowers has risen, the overall demand for these securitized mortgages has fallen significantly. This, in turn, has caused the value of many of these mortgage-backed securities to decline considerably, which has left Bear holding large numbers of devalued securities that few are willing to buy. Bear has been forced to write-down, or lower the estimated market value of, these securities, which has taken a big

Cite this Document:

"Enron The Smartest Guys In" (2011, March 07) Retrieved December 4, 2021, from
https://www.paperdue.com/essay/enron-the-smartest-guys-in-4278

"Enron The Smartest Guys In" 07 March 2011. Web.4 December. 2021. <
https://www.paperdue.com/essay/enron-the-smartest-guys-in-4278>

"Enron The Smartest Guys In", 07 March 2011, Accessed.4 December. 2021,
https://www.paperdue.com/essay/enron-the-smartest-guys-in-4278

Related Documents
Enron Movie Analysis the Smartest Guys in
Words: 1461 Length: 4 Pages Topic: Economics Paper #: 48295261

Enron (Movie) analysis The Smartest Guys in the Room-Enron The film is pitched around the America's seventh largest corporation that was in charge of distributing electricity and natural gas. The company was worth over 70 billion dollars in assets built over years with over 22,000 employees, it became bankrupt within 24 days. The employees lost their jobs and medical insurance, 1.2 billion in retirement benefits while the retirees lost 2 billion dollars

Enron: The Smartest Guys in
Words: 1034 Length: 3 Pages Topic: Economics Paper #: 68960826

These acts of corporate rapaciousness make it clear how easily ordinary citizens can be hurt when executives try to make money 'creatively' by moving money rather than producing a product or fulfilling a real service. Enron is often mistakenly called an energy company, but it was really more of a speculative entity. This is another illuminating aspect of the documentary for those viewers who may only know about the

Enron Corporate Scandal and Microeconomics
Words: 975 Length: 3 Pages Topic: Economics Paper #: 38293784

Microeconomics Enron Corporation is an example of one of the largest corporate scandals in the history of the United States. Given a series of corporate mismanagement, Enron is regarded as a shocking example of corporate corruption in the modern business world. The company took 16 years to increase its assets from 10 billion to 65 billion, which was significantly reduced in 24 days (Gibney, 00:00:38-00:00:47). Enron’s corporate scandal has been the

Enron's Organizational Behavior
Words: 3711 Length: 12 Pages Topic: Energy Paper #: 79670046

Enron Leadership Enron collapsed very quickly in November 2001, and its failure should have been a warning to serious dysfunctions in the entire corporate and financial system, but this did not happen. Its executives admitted that they had falsified its records going back for at least five years, although in reality they had been doing so since the 1980s. When the company filed Chapter 11 bankruptcy it laid off over 20,000

Enron Lessons From Enron Pride Goes Before
Words: 618 Length: 2 Pages Topic: Economics Paper #: 25724827

Enron Lessons from Enron Pride goes before the fall, so they say, and there is certainly a high degree of hubris present in "the smartest guys in the room." As it is pointed out early in the film by Amanda Martin-Brock, former executive at Enron, "The fatal flaw at Enron, if there was one, you say it was pride -- and then it was arrogance, intolerance, greed." Pride, intolerance, and greed may

Enron Ethics and Leadership Failures
Words: 1198 Length: 4 Pages Topic: Ethics and Morality Paper #: 81365802

Ethics and Leadership Failures: The Enron Case Gibney's 2005 documentary film Enron: The Smartest Guys in the Room reveals some of the main ethical weaknesses in an unbridled neoliberal capitalist market system. Barely addressing environmental and social justice issues, the filmmakers instead choose to focus on organizational culture, leadership, and ethical decision making within the corporation. The film illustrates the core concepts of business ethics and shows how executives shape company