Enron Essays (Examples)

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Mark to Market Accounting and

Words: 3061 Length: 10 Pages Document Type: Essay Paper #: 7061417

28)

This quotation shows how arbitrary MTM can be. Simply by terming Enron's cash shortage a sa minority interest as opposed to the proper term for it, debt, Enron was able to manipulate MTM to prevent such a sizeable loss from appearing on its balance sheet. Moreover, MTM's role in this transaction allowed Enron to repair its problem of a cash flow shortage since it credited $500 million via its sale of Treasury securities. The relative short duration in which Enron was able to take out a loan and repay it indicates how effective MTM was in providing Enron a favorable balance sheet, and in singled-handedly dancing around the reality of its shortages. Additionally, it also kept others (shareholders, stakeholders, not to mention its hard working employees) to know how tenuous an economic position the company was actually in.

In discussing Enron's MTM approach to accounting and the considerable role…… [Read More]

References

Batson, N. (2003). "Second interim report of Neal Batson, court appointed examiner." Enron Corp et al., v. Debtors.

Monks, R.G., Minnow, N. (2008). Corporate Governance. New Jersey: Blackwell Publishers. Retrieved from  http://www.ragm.com/enron/accounting.html 

Valdmanis, T. (2008). "Senate report blasts SEC's Enron oversight." USA Today. Retrieved from  http://usatoday30.usatoday.com/money/industries/banking/2002-10-06-sec_x.htm
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Arthur Anderson Is Considered One

Words: 863 Length: 3 Pages Document Type: Essay Paper #: 11308609



here are three primary factors that influence the company's current strategic, tactical, operational and contingency planning. he first factor is the increase in competitiveness within the industry in general. he rise in private and small scale CPA practices within the United States now makes almost all of Anderson's clients institutional in nature. Although this is sustainable at the current level, the concern is that Anderson will not be able to grow its organization at a grassroots level. he implication is that if small to midsized companies are now employing private companies and individual CPAs rather than large accounting corporations, then Anderson must compete exclusively with the other four major corporations for large-cap companies. his is a strategy concern that has influenced Anderson's current tactical decision making. As a result, it has jettisoned many subsidiary operations in order to focus on its core auditing and financial services offerings. his was represented…… [Read More]

There are three primary factors that influence the company's current strategic, tactical, operational and contingency planning. The first factor is the increase in competitiveness within the industry in general. The rise in private and small scale CPA practices within the United States now makes almost all of Anderson's clients institutional in nature. Although this is sustainable at the current level, the concern is that Anderson will not be able to grow its organization at a grassroots level. The implication is that if small to midsized companies are now employing private companies and individual CPAs rather than large accounting corporations, then Anderson must compete exclusively with the other four major corporations for large-cap companies. This is a strategy concern that has influenced Anderson's current tactical decision making. As a result, it has jettisoned many subsidiary operations in order to focus on its core auditing and financial services offerings. This was represented by the spin-off of Anderson Consulting in 2000 into Accenture, and the slow increase in focus on its core business development.

Another major factor that has influenced the company has been the increased complexity of financial legislation. This can be evidenced in several areas; the most prominent is the recent Sarbanes-Oxley Act. This act was passed in the wake of Enron in order to create greater accountability for public companies. As a result, it means that it is harder than ever to become public in the United States. This means that there is much more business for the major accounting companies, and Anderson has begun positioning itself as one of the key industry leaders in helping companies become public entities.

The final factor has been the increasing competitiveness for top notch financial talent on a global scale. The globalization market has changed significantly the market for accounting and financial services, the opening up of China have especially been important to the new reality of the global market. As a result, Anderson had changed its tactical decision to including the expansion into a transnational corporation; the only way to fully account for this change is to understand exactly what is necessary in order to develop strong international relationships with emerging talent. Anderson has already taken major steps in these endeavors as it changed its global outreach initiative by pushing for a more universal agenda towards rewarding clients from all sectors of its business development equally. Overall Anderson has engaged in many different processes that impacts its global outreach.
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Merrill Lynch Barge Scenario Case Summary --

Words: 1193 Length: 3 Pages Document Type: Essay Paper #: 17497578

Merrill Lynch Barge Scenario

Case Summary -- Enron, a Texas-based energy company, was created in 1985 and had such phenomenal growth it was soon the seventh largest company in the U.S. until its bankruptcy in 2001. Enron was involved in a number of scandals, among which was the Nigerian Barge Case. Essentially, Enron attempted to sell interest in three power-generating barges off the coast of Nigeria, but was unsuccessful. By December of 1999, Merrill Lynch agreed to buy Enron's interest. Enron "loaned" ML 75% of the money, offering ML a guaranteed return of 15% on 7 million dollars ($1.05 million in 6 months). Essentially, the entire deal was a fraud, designed only to make Enron appear more profitable than it was. Most of the Enron promises were verbal, and the situation was never really a "sale," but a short-term leverage loan. Enron's objective, in fact, was to improve the way…… [Read More]

REFERENCES

Virtue Ethics. (March 2012). Stanford Encyclopedia of Philosophy. Retrieved from:  http://plato.stanford.edu/entries/ethics-virtue/ 

Aristotle. (2007). Nicomachean Ethics. New York: NuVision.

Flikschuh, K. (2000). Kant and Modern Political Philosophy. Cambridge: Cambridge University Press.

Flood, M. (May 13, 2005). Judge Hands Out Prison Time in Enron Barge Scam. Chon.com. From the Houston Chronicle. Retrieved from: http://www.chron.com/business/enron / article/Judge-hands-out-prison-time-in-Enron-barge-scam-1942569.php
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Sarbanes-Oxley Act Was Implemented in

Words: 584 Length: 2 Pages Document Type: Essay Paper #: 23204731

If this policy was in place at the time of the Enron scandal, Anderson may not have had any incentive to lie on behalf of Enron. Another extremely important rule that would have had an impact upon Enron is the rotation rule. The lead and concurrent audit partners cannot stay on a particular public company for more than five years, they must continually rotate. Had this rule been in place, Arthur Anderson himself who sat twenty years on Enron would not have had the opportunity to conduct deceit and destroy documentation.

The primary aspect of OX in application to preventing scandals such as Enron is provide much more repercussions for corporate finance abuse and more importantly, for greater responsibility for all parties involved in audits. The audit committee of all public companies are now required to overview all audits that are being conducted. In addition, CEOs and CFOs of public…… [Read More]

SOX would have had a major impact upon Enron because it provides many filters in which to catch corporate finance disclosure and duplicity. The creation of a public company accounting oversight board was the first major step of SOX. This board is designed to preventing auditing abuses. The board registers, oversees, investigates and disciplines all accounting firms that auditing public companies. As a result, it provided a level of supervision on accounting firms that was not there at the outset. In addition auditing standards were established across the board which put much more accountability in the hand of auditors and held them accountable to be checked by a national level committee. One of the key reasons that the Enron scandal occurred is because the accounting firm, Arthur Anderson, earned more from Enron in consulting services than in auditing. Therefore they were willing to compromise their integrity in order to preserve their consulting business. The new policy prohibits auditors from "contemporaneously" providing companies with both auditing and specific types of consulting services. If this policy was in place at the time of the Enron scandal, Anderson may not have had any incentive to lie on behalf of Enron. Another extremely important rule that would have had an impact upon Enron is the rotation rule. The lead and concurrent audit partners cannot stay on a particular public company for more than five years, they must continually rotate. Had this rule been in place, Arthur Anderson himself who sat twenty years on Enron would not have had the opportunity to conduct deceit and destroy documentation.

The primary aspect of SOX in application to preventing scandals such as Enron is provide much more repercussions for corporate finance abuse and more importantly, for greater responsibility for all parties involved in audits. The audit committee of all public companies are now required to overview all audits that are being conducted. In addition, CEOs and CFOs of public companies are required to personally certify accuracy for their financial reports. This holds them accountable and provides significant penalties for false certifications. These safeguards, if they were in place with Enron would have put much more reasonability and consequences upon the actions of the CEO and CFO, thus possibly deterring their actions. In general the criminal punishments associated with obstruction of justice and securities fraud. As a result, the deterrents in place may have well have deterred Enron, Anderson and all other parties involved to reconsider their actions.

The Role of Empirical Evidence in Evaluating the Wisdom of the Sarbanes-Oxley Act, 40 University of San Francisco Law Review 823-844 (2006) http://eprints.law.duke.edu/archive/00000840/" Public and Private Enforcement of the Securities Laws: Have Things Changed Since Enron?, 80 Notre Dame Law Review 893-907 (2005) (with Randall S. Thomas)
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Blow the Whistle on What You Heard

Words: 1086 Length: 3 Pages Document Type: Essay Paper #: 15849755

blow the whistle" on what you heard in the garden? If so, how will you blow the whistle? If you decide to blow the whistle, what are your reasons for doing so? Your discussion should reflect knowledge of what Boatright says about issues, problems and justifications for whistle-blowing. Also, in discussing the answers to these questions you should include the following: 1) you should evaluate real and potential conflicts of interests that confront you in your decision 2) you should explain how your reasoning is consistent or inconsistent with the three following moral theories: Kantian moral theory, utilitarian moral theory and virtue theory.

The situation

Our MBA is not really aware of what is going on; all he has is assumptions, guesses. He has no actual proof. In the first case, he has had suspicions of several transactions -- their accounting practices seem suspect - and he has pointed out…… [Read More]

Sources

"Behind the Enron Scandal - Multiple Articles." TIME 2002. 27 Apr. 2006 .

"BBC NEWS | Business | Enron Scandal At-a-Glance." BBC News. 22 Aug. 2002. The BBC. 27 Apr. 2006 .

"Enron Scandal - Information on Enron." Securities Fraud Fyi. 2003. 27 Apr. 2006 .

Hays, Kristin. "Prosecutor Questions Lay At Enron Trial." Business Week 27 Apr. 2006. 27 Apr. 2006
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Waste Abuse Fraud and Corruption

Words: 2980 Length: 10 Pages Document Type: Essay Paper #: 55120406

" hile there are factors like peer pressure and authority that come into play, some research claims to have isolated significant features of an individual's character that make them more likely to commit acts of fraud, bribery and falsification in the corporate context (27, 2009). For example, those people with "high levels of ambition were more likely to transgress moral codes, competitively stab colleagues in the back and make dubious decisions relating to asset-stripping, disinvestment, and so on" (27, 2009).

Trevino's (1986) work is relevant when it comes to understanding individuals and corruption. There are a couple questions regarding moral personality that come up: first of all, whether or not a person sees an event or issue as a moral problem; the second is how they decide to act in relation to that problem. Kohlberg's theory of cognitive moral development emphasizes the cognitive or reasoning aspect of moral-decision making (604,…… [Read More]

Works Cited:

Bratsis, Peter. The Construction of Corruption, or Rules of Separation and Illusions of Purity in Bourgeois Societies. Social Texts, 21(4), 9-33.

Burke, Ronald J. & Cooper, Cary L. Research Companion to Corruption in Organizations

(New Horizons in Management). Edward Elgar Publishers, 2009.

Fleming, Peter. & Zyglodopoulos, Stelios C. Charting Corporate Corruption: Agency,
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Corporate Governance Shell What Occurred

Words: 2084 Length: 6 Pages Document Type: Essay Paper #: 30992730



4. If Enron shareholders had been fully aware of the LJM partnership agreement, do you believe they would have been willing to continue investing in Enron?

LJM was created by Fastow allegedly to buy poorly performing Enron assets, but in reality to hide debt and inflate profits of Enron in order to leverage its stock price. It is almost certain that Enron shareholders would have ceased to continue investing in Enron had they been aware of the full significance of LJM.

LJM, in its essence, entailed that Enron was far below that which it's displayed to the public and that likely its debts were more massive and its profits far less than those claimed. Investors, obviously, would not want to invest in a poorly performing company.

Even if Enron's profits were higher and debts lower than those that the company tried to conceal, the very fact that Enron was not…… [Read More]

References

Arping, H., & Sautner, B. (2010). "The Effect of Corporate Governance Regulation on Transparency: Evidence from the Sarbanes-Oxley Act of 2002." Papers.ssrn.com.  http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1561619 . Retrieved 5/11/2012

Environment and Society. (2007)"Environment and Society -- Shell General Business Principles." Shell International B.V.

Fombrun, C. & Foss, C. 2004, 'Business ethics corporate response'. Corporate Reputation Review, 7, pp.284 -- 288

Healy, Paul M. & Krishna G. Palepu (Spring 2003). "The Fall of Enron" (PDF). Journal of Economic Perspectives 17 (2): 15.
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Lynn Brewer Was Employed in

Words: 1206 Length: 4 Pages Document Type: Essay Paper #: 28060370

People will say everybody else does this and gets away with it, could it be that wrong? It comes down to economics vs. ethics.

The difficult thing for me personally is that I do not know how I would have reacted in this situation. I would like to think that I would have tried to blow the whistle or at least try to talk with someone in authority about the problem. If this did not work, I would like to think that I would have quit and went someone place else that I believed were more ethical. However, until being in such a situation, I do not know exactly how I would have reacted. I may have bitched and complained with other employees in the lunchroom or over the phone at night. However, would I have gone the extra step? Would I have been brave enough? I am not sure.…… [Read More]

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Improvements in Integrity Financial Accountability Ethical Conduct

Words: 1568 Length: 5 Pages Document Type: Essay Paper #: 64221091

Improvements in Integrity, Financial Accountability, Ethical Conduct and Corporate Responsibilities under the Sarbanes-Oxley Act of 2002

e passed Sarbanes-Oxley in the wake of the Enron scandal to try to root out financial and accounting irregularities. How could similar irregularities occur at Lehman Brothers? History has a way of constantly repeating itself. -- Joseph Grant 2010

The high-profile corporate shenanigans by Enron and Lehman Brothers have made it clear that tough legislation was needed to compel Americans businesses to clean up their financial acts. Indeed, in response to Enron's late 2001 bankruptcy, Congress enacted the Sarbanes-Oxley Act of 2002 but the Lehman Brothers' bankruptcy in late 2008 made it clear that there was still a problem in some sectors of American business. This paper provides a review of the relevant literature to determine how the integrity of corporate finance, ethics, and other responsibilities have improved, what the corporate finance industry culture…… [Read More]

Works Cited

Bierstaker, James, Marshall, Kenneth K. And Greenwald, Jonathan. (2010, December).

"Strengthen Your Core: Are You Getting the Most from Your Compliance, Operations,

Risk, and Enterprise Support Functions?" Strategic Finance 92(6): 35-39.

Carter, Charles C. (2011, May 1). "Freefall: America, Free Markets, and the Sinking of the World Economy." Journal of Real Estate Literature 9(2): 492-499.