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    Enron Case Study

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    naila khan
    Enron was an energy company that grew rapidly in the late 1990s through fraudulent accounting practices. Led by Kenneth Lay, Jeffrey Skilling, and Andrew Fastow, Enron hid billions in debt through off-balance sheet partnerships and misreported finances. This allowed senior executives to profit while the company's true financial situation was concealed. In 2001, Enron collapsed under the weight of its concealed debts and filed for bankruptcy, costing investors tens of billions and destroying the retirement funds of thousands of employees. The scandal exposed widespread accounting fraud and lack of oversight, leading to new regulations and legal reforms through the Sarbanes-Oxley Act of 2002.

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    Enron Case Study

    Uploaded by

    naila khan
    214 views7 pages
    Enron was an energy company that grew rapidly in the late 1990s through fraudulent accounting practices. Led by Kenneth Lay, Jeffrey Skilling, and Andrew Fastow, Enron hid billions in debt through off-balance sheet partnerships and misreported finances. This allowed senior executives to profit while the company's true financial situation was concealed. In 2001, Enron collapsed under the weight of its concealed debts and filed for bankruptcy, costing investors tens of billions and destroying the retirement funds of thousands of employees. The scandal exposed widespread accounting fraud and lack of oversight, leading to new regulations and legal reforms through the Sarbanes-Oxley Act of 2002.

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    Enron was an energy company that grew rapidly in the late 1990s through fraudulent accounting practices. Led by Kenneth Lay, Jeffrey Skilling, and Andrew Fastow, Enron hid billions in debt through off-balance sheet partnerships and misreported finances. This allowed senior executives to profit while the company's true financial situation was concealed. In 2001, Enron collapsed under the weight of its concealed debts and filed for bankruptcy, costing investors tens of billions and destroying the retirement funds of thousands of employees. The scandal exposed widespread accounting fraud and lack of oversight, leading to new regulations and legal reforms through the Sarbanes-Oxley Act of 2002.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    214 views7 pages

    Enron Case Study

    Uploaded by

    naila khan
    Enron was an energy company that grew rapidly in the late 1990s through fraudulent accounting practices. Led by Kenneth Lay, Jeffrey Skilling, and Andrew Fastow, Enron hid billions in debt through off-balance sheet partnerships and misreported finances. This allowed senior executives to profit while the company's true financial situation was concealed. In 2001, Enron collapsed under the weight of its concealed debts and filed for bankruptcy, costing investors tens of billions and destroying the retirement funds of thousands of employees. The scandal exposed widespread accounting fraud and lack of oversight, leading to new regulations and legal reforms through the Sarbanes-Oxley Act of 2002.

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    BY

    NAILA KHAN

    ENRON CASE STUDY


    (BUSINESS ETHICS)
    About Enron!!!!!!!
     The Enron corporation was created out of the
    merger of two major gas pipeline companies in 1985.
     Provided natural gas, electricity & communication .
     In year 2000 the Enron's annual revenue reached
    $100 billions and became world largest industry in
    the world.
     From 1998 to 2000 alone, Enron's annual revenue
    grew from about $31 billion to more than $100
    billion, making it 7th largest co. of fortune 500.
    Key man involved in the scandal

     KENNETH LAY
    (chairman)
     JEFFREY SKILLING
    (Chief executive officer)
     ANDREW FESTOW
    (Chief financial officer)
    About the scandal
     Enron case was clear picture of high level accounting fraud
    through which the co’s top level officials profited personally
    through illegal transfer of funds.
     In 2001 Enron filed for bankruptcy
     In collapsed under a mountain of debt which had been
    concealed through a complex scheme of “ off balance sheet
    partnerships”
     Enron used “special purpose entities (SPE’s)” to conceal
    losses.
     Enron had established the SPE’s to move assets and debt of
    its balance sheet & to increase cash flow by showing that
    funds were flowing through its books when it sold assets.
    Enron’s partners in scandal

     Vinson & Elkins


    Legal firm which supported all of Enron’s illegal
    activities.
     Merrill lynch
    Investment booking firm
     Arthur Anderson LLP
    Audit firm which helped Enron in all its
    accounting frauds.
    The impact/effects of Enron’s scandal

     Caused tens of billions of dollars of investor


    losses.
     Collapse of electricity-trading markets.
     Global loss of confidence in corporate integrity.
     4000 employees struggling to find job
     1 senior Enron executive committed suicide.
     Many retires were forced to return to work in a
    bleak job market as their Enron heavy
    retirement portfolio were wiped out.
    Consequences
     Enron faced many law actions.
     Arthur Anderson feces some 40 shareholders lawsuits
    for damages more than $32 billions.
     In July 2003 Enron announced its intention to
    restructure & plan to pay off its creditors.
     Most creditor would receive between 14.4cents &
    18.3cents for each dollar they owed.
     The most important result Enron’s scandal was the
    passage of sarbans-oxiley Act of 2002.
     This act prescribes the internal control requirement for
    publicly traded companies.

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