This website uses cookies to ensure you have the best experience. Learn more

The Collapse Of Enron Essay

1092 words - 5 pages

On the 2nd of December 2001, Enron, at the time the seventh largest company in the US, filed for Chapter 11 becoming the biggest bankruptcy in any industry anywhere with losses around the $60B mark. The company's share prices fell from a high of $90 in August 2000 but were trading on the markets at about 45 cents.Enron started life as a regional gas pipeline company in 1985, but by 2001 it had become the world's largest energy trading company. Company success came about because of Enron's ability to exploit the trading opportunities brought about by deregulation in the late 1980's allowing users to buy gas or electricity from a number of producers. Before long it was the sweetheart of Wall ...view middle of the document...

These matters, however interesting, are not the focus of this essay and will play no further part. The rest of this essay will now concentrate on the role played by Enron's auditors, Anderson, and their position in relation to the possible cover up of Enron's vast losses and their possible negligence and lack of professional independence.Anderson was undoubtedly guilty of something; the fact that reports suggests that both Enron and Anderson destroyed thousands of documents and emails would tend to confirm this. Either Anderson was guilty of serious professional negligence, or more sinisterly, he had knowledge of what was going on but remained silent to keep the fees of one of their major clients. The fact is that auditors are seen in the public's eyes as being held accountable in cases such as this where the accounts had been signed off.Though in the case of Anderson, there could be a degree of downplaying on their role due to the claim by many auditors that if corporate fraud is involved the auditor's responsibility is diminished. This is one of the best instances were the audit expectation and performance gap comes into play. That is the gap between what society expects from its auditors and what it perceives it receives from them. Though in Anderson's situation it looks as if there could have been a major breakdown of independence within the Houston office, which has lead them to sign off the grossly overstated accounts. This independence has been referred to as "the cornerstone of auditing".This reflects the fact that if auditors could be influenced by other parties either within the firm being audited, their own firm, or by an outsider, it makes the job virtually worthless. In order for an audit to be worth something the auditor must be independent in fact and appearance. There are many ways in which independence can be compromised, including owning a stake in a company being audited, and having problems challenging...

Find Another Essay On The Collapse Of Enron

The collapse of USSR Essay

7455 words - 30 pages The collapse of USSRRussian state collapsed twice during the twentieth century. Russian Empire disintegrated while fighting and losing a foreign war . The Soviet Union collapsed in 1991, in time of peace, a few decades after winning the biggest war from Russian`s history. The first collapsed was before the communists came to power; and the second during the communist rule.The aim of this paper is to centralize distinct factors , certain

The collapse of biodiversity Essay

938 words - 4 pages companies tend to outsource to the countries with weak environmental protections (Hansen, 2010). Consequently, the principal environmental cost of globalization is habitat loss and degradation, which further leads to the accelerated extinction of wild species and the collapse of biodiversity. Thus, terrestrial protected areas and international agreements are necessary to preserve habitat and halt biodiversity loss. The collapse of biodiversity would be

The Collapse of Segregation

953 words - 4 pages The Collapse of Segregation Segregation and discrimination due to race was made completely illegal by 1970. 1954 saw the end to legal segregation in schools; in 1955 it was made illegal to practise segregation on busses. The Civil Rights Act was passed in 1957, which outlawed racial discrimination in employment, restaurants, hotels, amusement arcades, and any facilities receiving government money. In 1965 the Voting

The Collapse Of The USSR

821 words - 3 pages The collapse of the USSR was one of the most significant events of the twentieth century. Mikhail Gorbachev played a role in the collapse of the USSR; however, he was not solely responsible for everything that took place in the fall of the USSR. Previous leaders as well as other politicians led to the collapse of the USSR.When Gorbachev came into power, the economy was very weak and there was a lot of corruption in the government. In an effort

The Collapse of the USSR

1234 words - 5 pages During the 1970’s and the 1980’s the Soviet Union was recognized worldwide as being a strong political power, although the Soviet Union was not as it appeared to be. When Mikhail Gorbachev (see Figure 1) was elected General Secretary of the Communist Party of the Soviet Union on 11 March 1985, not one soul could have predicted that in 6 years the Soviet Union would collapse into fifteen separate states. He attempted to make the Soviet system

The Collapse of the Autocracy

2831 words - 11 pages The Collapse of the Autocracy The collapse of the autocracy in February 1917 signified the end product of the interaction of multiple factors relating to both domestic and foreign issues. The traditional historiographical view of a rapid insurrection catching the autocracy by surprise is increasingly called into question - Hasegawa sees the abdication

The Collapse of the Concordé

898 words - 4 pages The Collapse of the Concordé October 24,last departure of the Concordé and farewell to the supersonic airplane, the engineering triumph that was ahead of its time. This powerful machine made its last journey from New York to London. For many people it was a dream that came true and is now dying but still a lot of them will be waving their hands at Heathrow to pay the last tribute to this miraculous aircraft. Are

The ENRON scandal: The downfall of the ENRON corporation

1270 words - 5 pages about taking profits now and worrying about the details later. The Enron system was just ripe for corruption."ģThe collapse of the Enron Corporation had a huge impact on various people and institutions. Thousands of Enron employees were left unemployed. Enron had encouraged employees to invest in the company and matched their 401(k) contributions with company stock prior to the final stock plunge. Billions of dollars in stock value

Collapse of the Soviet Union

1001 words - 4 pages denial of the Baltic states' independence for, to the extent that those Soviet republics became democratic, their opposition to remaining in a political entity whose centre was Moscow would become increasingly evident.Some claim that United States President Ronald Reagan's escalation of the arms race between the superpowers caused the USSR to bankrupt itself and collapse. In reality, massive Soviet military spending during the 1970s had caused

Collapse of the Weimar Republic

1555 words - 6 pages Collapse of the Weimar Republic “On 2 August 1934, President Hindenburg died. Within an hour of his death Hitler announced that the offices of chancellor and president were to be combined and that he was the new head of state. Hitler’s adolescent dream of becoming Fuhrer of the German people had been realized” President Hindenburg’s death marked the official end of the Weimar Republic, a democratic ‘experiment’ that had lasted since

Collapse Of The Twin Towers

1734 words - 7 pages immense ten-acre foundation hole, seventy feet deep, that was suffering unimaginable violence as it absorbed the force of each tower's collapse. (Online) Over the first few hours, the volunteers joined with the firefighters and the police, who by then were shaking off their disbelief and struggling to take effective action. By afternoon thousands of people in these combined forces were searching through the ruins for survivors, attacking the

Similar Essays

"Enron Collapse": The Causes For The Collapse Of Enron Corporation

983 words - 4 pages The fall of the colossal entity called Enron has forever changed the level of trust that the American public holds for large corporations. The wake of devastation caused by this and other recent corporate financial scandals has brought about a web of new reforms and regulations such as the Sarbanes-Oxley Act, which was signed into law on July 30th, 2002. We are forced to ask ourselves if it will happen again. This essay will examine the collapse

The Fall Of Enron Essay

716 words - 3 pages treasurer, was highly vexed about the conflicts, “complained mightily” and suggested a list of remedies. Skilling served as the CEO of Enron for six months in 2001 for resigning for personal reasons. J. Clifford Baxter, (former Enron Vice Chairman) was one of 29 former and current Enron executives and board members names as defendants in federal lawsuit, after he sold over 500,000 shares of Enron for $35.2 million before Enron’s collapse. Sherron

The Fall Of Enron Essay

1041 words - 5 pages The film Enron: The Smartest Guys in the Room was a great film loaded with examples of unethical behavior with Enron being an unethical corporate culture. The film portrays the rise and fall of Enron, one of the most corrupted corporations this country has seen. Enron had started off as a promising energy company with a vision to do good which quickly turned sour when top executives torn the company down while stealing millions of dollars from

The Downfall Of Enron Essay

2073 words - 9 pages proper ethics, it is representing not only itself in a positive manner, but its partners, shareholders, and clients as well. On the other hand, when an organization partakes in unethical activities, all parties are negatively affected. The collapse of Enron is a major case of unethical conduct in the corporate world, because the circumstances surrounding the firm’s chaotic plunge where so scandalous that it left “creditors wrangling over Enron's