Enron

Enron and Arthur Andersen Case Study Abstract This case is to the highest degree the comp some(prenominal) Enron which grew to bewilder the one-seventh largest company in the United States. There were many a(prenominal) problems in the Enron case. First, when the gas bank was created, they should buzz off image twice about this since many of the natural gas producers pauperism cash which Enron did non piddle. This would lead to problems for Enron. Second, Enron created SPEs which ca apply to a greater extent problems because they were providing currency and keeping the money off the books so that investors could non see what was actually deprivation on. These SPEs only manifold issues for Enron and its investors. The internal controls that were ignored when LJM1 was created were one, LJMs books were kept separate from Enrons. Arthur Andersen should non stupefy allowed LJMs financial statements to go unconsolidated. Two, any SPE that was created must have a cert ain dowery of equity owned by outside investors. The LJM1 failed to do that. Three, Enron allowed Fastow to dumbfound on the Board of Directors of LJM1, which was a violation of their Code of Conduct. Four, Fastow used Enron stock as its groovy to sell the Rhythms stock. This is a catch violation as it created a scenario where Enron was basically insuring itself, and therefore, without insurance.

Enrons harsh act reexamination could have importantly aided their company, because the performance review was so strict that if soulfulness was not performing in a given level of time, they would indicate a despicab le rating to that employee and fire them. Th! is caused employees to be at the top if they evaluate to remain an employee. Strict guidelines could have ensured that Enron employees followed all government guidelines and any Code of Ethics that Enron had in place. I believe that the belie of financial statements occurs so oft because it is easy to do. Companies find slipway around inputting the correct financial information. Auditors and other governmental agencies have so...If you want to get a full essay, order it on our website: BestEssayCheap.com

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