Enron scandal

control mechanism and the auditors should take risk of fraud, and should adapt the audit based on the skeptism and the findings. The mechanism of noticing the fraud detection hotline is absent in the Kmart. Accounting issues and impacts The actual scandal of the Kmart can be classified as an issue of recognizing the allowances prematurely on the basis of false information provided by the company’s accounting department. The number of vendor representatives co-signed the false and the misleading…

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 today’s society, there are many legal risks that could arise within an organization. Employees could embezzle money from the company, company data may be exposed, or a hacker could enter into the secure company network. All of these situations have legal risks associated to them and the legal risks would cost the company thousands of dollars, which could make the company go out of business. In order to reduce these legal risks, the Sarbanes-Oxley Act was implemented by Congress to help…

He was introduced to the carpet cleaning industry at the age of twelve by his mother, who worked as a telephone solicitor for a small carpet cleaning firm. Due to the lack of barriers to entry in this industry (no licensing requirements, no apprenticeships to be served and only minimal start-up capital needed), it is not hard for anyone to start a carpet cleaning company. But at the same time, no barriers to entry meant that there was a cutthroat competition within the industry and it was not…

interest of the public. “The auditor’s obligations are to certify that public reports depicting a coronation’s financial status fairly present the corporation’s financial position and operations” (Duska, Duska, & Ragatz, 2011). During the WorldCom scandal, Arthur Anderson, originally one of the big five accounting firms, failed their duty as auditors and overseers of the accounting profession. As external auditors, they have a duty to detect any fraud and irregularities and fell short of that…

PCH PLC was recognized as a well-established IT company when it was listed in the CSE in 2010 but suddenly after two years from listing, the whole company was collapsed due to failures/frauds occurred within the company. The focus of this section is to discuss about the corporate governance failures/weaknesses of PCH PLC which affected to arise such failures/frauds within PCH PLC. Throughout this discussion it is expected evaluate the board structure & board balance, Chairman’s role as the CEO,…

MIDDLE EAST TECHNICAL UNIVERSITY FACULTY OF ECONOMIC AND ADMINISTRATIVE SCIENCES DEPARTMENT OF ECONOMICS ECON 433 THE RISE AND THE FALL OF ENRON CORP. BERKEHAN KAYA 1917350 Introduction Enron Corporation was the corporation which had the largest natural gas transmission networks in North America continent. In 2000, the company was on the Fortune 500 list with the seventh seat, but its bankruptcy in December 2001 was even larger. The name of the company, then, displayed whenever the…

Abstract APOC, founded in 1909 as Anglo Persian oil company, was bought by England over more than 51% of its stock when it was about to fail on the initiative of Winston Churcill. It was subsequently privatized by the Thatcher campaign in the 1980s and soon became a major oil and refining company, with interests in clean blacks (such as solar panels) and attention to security procedures. But is all this enough for such a global company? Introduction BP, over time, suffered from a chain of major…

As of last week albert Bacon Fall had secretly granted Harry F. Sinclair of the Mammoth Oil Company exclusive rights to the Teapot Dome in Wyoming on April 7, 1922. After Pres. Warren G. Harding had transferred supervision of the naval oil reserve lands from the Department of the interior, that’s when Fall granted Sinclair the oil rights. When leases and contrasts went under investigation by committees of the U.S. Senate . Fall and members of his family had received from an unknown source…

The men in the 19th century discovered the unbelievable properties of an unknown liquid. It turned out that by simple distillation, it could be metamorphosed into a lubricant and lighting oil, superior and much cheaper to those which were known till now. The only known substance which experienced this type of acceleration was gold during the gold rush. Oil was not an exception. The discovery of both of them intrigued the attention of major business tycoons. John D. Rockefeller was one of them.…