Finally we will take a closer look at the involvement of the board of directors of public companies to comply with corporate governance procedures after the debacle of Enron. Skilling joined Enron in from the consultancy firm McKinsey, where he had developed financial instruments to trade gas contracts.
The big auditing firms already have promised major changes in the way they do business. While Andersen fired Duncan, its Chief Executive Officer, Joseph Berardino, insisted that the firm did not act improperly and could not have detected the fraud.
These are serious problems, but corporations have survived worse, and Enron could have been fixed with new management committed to reform.
Majority directors must be independent Empowerment of Independent Directors. This ban was later lifted, which has caused the rise of awkward questions faced by the Labor party now. Corporate Governance - The board of directors is meant to protect the interest of the shareholders. Following this debacle, the US authorities have analyzed the situation and have attempted at undoing the wrong in a variety of ways.
Baxter retired from Enron in May Baxter committed suicide in January We will summarize the efforts made by the US authorities in rectifying the discrepancies in the regulations of business practices in corporate America. Enron was mainly a trading company, a business that depends on good credit and customer confidence.
Corporate and Criminal Fraud Accountability - Criminal penalties, protection of employees, security fraud, etc. What steps should be taken now by corporate managers, stakeholders, and policy makers to prevent a similar event from occurring in the future?
Baxter was known to have been one of the Enron executives, who had opposed its creative accounting practices. Enron made failed investments in fiber-optic networks, a power plant in India, and water distribution in the U.
However, Enron was an energy industry, due to its bankruptcy; a better environment could be seen, this positively affected the local communities. Enron was mainly a trading company, a business that depends on good credit and customer confidence.
Two of the three major accounting firms that still act as consultants will no longer sell many of those services to the same companies they audit.
For this purpose all companies to be listed require an internal audit function and this is meant to increase governance of listed companies.
Analyst Conflict of Interest - Treatment and appointment of security analyst Commission Resources and Authority - Authorization of appropriations, appearance and practice before the commission, etc. In Augusthe resumed leadership after Skilling resigned. Those restrictions should be imposed.
However, several of them were critical, especially those being considered as market stakeholders such as suppliers, creditors, employees, and stockholders.
Fastow Former Chief Financial Officer. Those restrictions should be imposed by the government and monitored by the U. That could have blunted the losses of Enron employees who had company stock in their retirement plan.
There are also several steps the government should take to prevent future scandals: The loopholes in the accounting system need to be rectified.
The administration and Congress also are considering a range of ways to protect small investors whose portfolios are dominated by an individual stock. Sure, kicking around Ken Lay and other former Enron executives may satisfy the blood lust back at home, but where was the concern in Congress for these reforms when Enron was flush a year or two ago?
Corporate Tax Return - Signing of corporate tax return by chief executives Corporate Fraud and Accountability - Tampering with records, persons serving as officers or directors, increased criminal penalties, etc.
Lay took up the reins at Enron in after it was formed from the merger of two pipeline firms in Texas and Nebraska. In the case of creditors, a large sum of money would be gone, both principle and interest that they could have gained.
They hid these losses under their many subsidiaries, often in foreign countries.Enron Essay. Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron, there was a chain-reaction of events and a hole that dug deeper with time in the life-span of, at one time the world's 7th largest corporation, Enron.
Free Essay: Deception, Fraud, and the Collapse of Enron Introduction From America’s 7th most valuable company in Decemberto a company in ruins by.
The Collapse of Enron. 1. Who were the stakeholders involved in, or affected by, the collapse of Enron? All stakeholders were, obviously, affected by the collapse of Enron.
However, several of them were critical, especially those being considered as market stakeholders such as suppliers, creditors, employees, and stockholders/5(1).
Enron Summery of Enron case The Enron scandal has far-reaching political and financial implications. In just 15 years, Enron grew from nowhere to be America's seventh largest company, employing 21, staff in more than 40 countries.
Free Enron Accounting Essay Analyse the corporate governance procedures in place in the U.S. after the fall of Enron, particularly the role of the board of directors. The Rise And Fall Of Enron Essay Words | 4 Pages The Rise and Fall of Enron The objective of every company is to maximize profit, become a big player and remain viable.Download