Enron Essay

Following the pervasive financial losses which occurred as a result of the great depression, the U.S. Securities and Exchange Commission (SEC) was established with the guiding principle to instil confidence in current and potential holders of stocks and bonds that publicly traded companies are managing funds efficiently and appropriately, which is to be achieved through “full disclosure” of the organizations’ financial performance in the form of quarterly and annual financial statements…

In 2002, the Sarbanes-Oxley (SOX) Act was passed by congress and signed into law by President George W. Bush. SOX was written as a response to several major accounting scandals that occurred at large companies (including Enron, WorldCom, and Tyco) in the early 2000’s. These scandals forced capital providers and the general public to question the judgement of public accounting firms as well as at the overall reliability of the financial reporting and audit process. The requirements included in…

After the Enron debacle and the WorldCom disaster, Congress decided to enact legislation that would help to protect investors and improve the accuracy of corporate financial statements. The new legislation would be called the Sarbanes-Oxley Act (SOX). This legislation was a major turning point at the time it was passed. This gave investors renewed confidence and made many corporations angry due to the excessive compliance costs. With the new legislation in place many people thought that this…

In elementary school, I struggled with the comprehension of the material in my classes. Although, this was a simpler time period in my school career I never excelled in any specific subject until middle school. I have always suffered through Writing and English courses, but began to transcend in math at age eleven. It was at this age where I began to rationally think about my career options in this field. At the time, and even today still, I was intrigued by fashion. Anything from the runways to…

Hearing about these giant fraud cases, especially the ones you talk about in class often like Enron; I always wonder how they are caught, or even how long it takes. As an example from a while back, but still seen as one of the largest Ponzi schemes in history the Madoff Fraud Case. This case took a while for the SEC to catch onto what was going on. As we learned in class the SEC is out there in the financial industry to keep the stock market fair and honest. The SEC authority is given by…

The unethical practices of corporations like Enron and Worldcom called for a restructuring of the financial reporting system. It was signed into existence on July 30, 2002 by President George W. Bush, which was considered by many to be reactionary and perhaps rash. The Sarbanes-Oxley Act is named after…

As the seventh biggest company in the United States at the time, Enron’s downfall in 2001 sent seismic shocks through corporate America. A week before Enron disclosed charges for bad investments totaling more than $1 billion, Arthur Andersen, Enron’s accounting firm, started shredding documents as well as emails that connected them to Enron’s crime. After Enron’s bankruptcy announcement, Congress turned its attention to the regulatory and legal aspect that enabled Enron’s façade to go on for…

reporting and auditing.” Bor-Yi and Sean Chen started their article by talking about that the going concern assumption has been under review for the past decade due to many businesses going bankrupt these last ten years such as General Motors and with Enron and WorldCom. To begin, on the issue of going concern is that in…

Internal control violations There was a total internal auditing division violation of the regulation in the K-Marts case. When the disproportional asset inflation was seen in the company revenues, it should have been immediately reported to the SEC and other concern authorities, but it was not done. In fact, the amount inflated was almost 10% of the total revenues are the inflated revenues. Therefore, internal control mechanisms of Kmart should play the role of the whistleblower policies. The…

Defined as “a predictable surprise as an event or set of events that take an individual or group by surprise, despite prior awareness of all the information necessary to anticipate the events and their consequences...” by the authors Max Bazerman and Michael Watkins, the book Predictable Surprises sheds light on the question that surrounds many events in our live; the question of “could we have prevented this from happening?” In three parts, the book goes over how we can go through the motions…