Enron And The World 's Major Accounting Scandals Essay

1425 Words Nov 30th, 2015 null Page
When discussing two of the world’s major accounting scandals, it’s important to first define what a “scandal” is. The most applicable definition is as follows: “an action or event regarded as morally or legally wrong and causing general public outrage.” Enron and WorldCom have certainly caused public outrage through their illegal, immoral, and unethical actions. While each scandal is in itself an expansive episode, they each have similarities and have both impacted the industry in ways that were far unseen by each company.
So, who are Enron and WorldCom anyway? Enron was the largest marketer of natural gas and electricity. Based out of Houston, Texas Enron was in control of a massive natural gas transmission network – over 36,000 miles at the time of the scandal. Enron was composed of two major companies: Houston Natural Gas and InterNorth. Houston Natural Gas, started as Houston Oil Co. in the 1920’s, had asset worth of $3.7 billion and profits of over $123 million dollars. InterNorth, the other side of the merger, is mainly responsible for the extensive network of pipelines that Enron came to cash in on. They had about $7.5 billion dollars in revenue, making acquiring Houston Natural Gas for $2.4 billion dollars a cakewalk. Shortly after the merger, they became wildly successful. In 2000, the company reached the seventh spot on the Fortune 500 list, bringing with it massive amounts of respect, publicity, and profitability along with it (Frontain, 1). Moving on to…

Related Documents