Enron Case Study Analysis

Running Head : (Author s Name (Institution s NameS . No carry over of Contents Page No1 Enron example : A Background 32 Enron : An Introduction 63 Enron Case : An Organizational Analysis 84 Enron : An Ethical Outline 255 Business Ethics : A writings Review 306 Enron Scandal : An Ethical Analysis 327 Conclusions 388 References 41 Enron Case : A BackgroundEnron was ranked in the USA s Fortune back 10 list of companies , based on its earnings in 2000 . Its published accounts for the year ended 31 December 2000 showed a profit of 979 zillion and there was nil evident to bouncy sh beholders to the imminent disaster that was going to happen upon over the following year or so and make Enron the largest insolvency in US historyEnron s difficulties related to its workivities in the energy market and the setting up of a series of `special purpose entities (SPEs . Enron used the SPEs to hold back large losses from the market by giving the visual aspect those third parties covered crucial exposures . Nevertheless the SPEs were really nothing more than an extension of Enron itself and so Enron s risks were not covered . just about of the SPEs were used to transfer funds to roughly of Enron s directors . In October 2001 , Enron declare a non-recurring loss of 1 billion and also had to disclose a 1 .2 billion write-off against shareholders funds . later(prenominal) , Enron made known another accounting problem which lessen its value by over half a million dollars . It looked as though a takeover might be on the cards from Dynegy , however in November announcements by Enron of supercharge debts led to the takeover bid falling through and in December 2001 Enron d for bankruptcyIn retrospect , it seems that the directors were not interrogated closely plenteous about the use of the SPEs and their accounting treatment .

What has become buy the farm is that there was some concern in Enron s auditors - Andersen , about the SPEs , and Enron s activities . Andersen failed to intercommunicate the directors hard enough and Andersen s own fate was sealed when some of its employees shabby formalities relating to Enron , hence eliminating crucial evidence and bring to the failure of Andersen which has itself been taken over by different rivalsThe Enron typesetters case focuses upon the principal need for integrity in business : for the directors to act with integrity and honesty , and for the external audit firm to be able to ask probing questions of the directors without holding back for affright of possibly offending a beneficial client . This last mentioned situation is aggravated when auditors receive large fees for non-audit services , which whitethorn well exceed the audit fee itself , as a result endangering the independence of the auditors . Enron also highlights the need for independent non-executive directors who are qualified enough to be able to ask scrutinizing questions in board and committee meetings to try to make indisputable that the business is operated properly according...If you want to get a replete essay, order it on our website: Ordercustompaper.com

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