Enron

Enron: A Cautionary Tale The systemic issues raised by this racing shell atomic number 18 the additional Purpose Entities that Enron paying several cardinal dollars to their consulting firm, Arthur Anderson, to set up so that Enron would be up to(p) to tucker out some the debt problem created when they decided to trade in more than markets. til now though accounting rules allow special intent entities to be excluded from a companys financial statement if an demote party has control, I think that Enron ran into problems when their independent parties were in truth employees of the company. somatic issues raised by this case are issues with both Enron and Arthur Anderson. Enron paid Arthur Anderson a lot of money for their expert supporter so they would not have to report their newly acquired debt and shew the company look to shareholders as if they had taken on withal very much debt. Enrons plug-in of directors would also be a corporal issue in this case as many a(prenominal) of the members of the hop on had consulting contracts with Enron. Individual issues raised by this case are the actions of Enrons Jeffrey Skilling, President and COO, and Andrew Fastow, CFO. Both of these individuals looked for ways to haze over the debt that Enron was getting with the working out into new markets.

Even if the special purpose entities were judge chthonic the GAAP rules and the value of Enrons stock had not fallen, the practices that Enron were doing would stock-still be wrong. The special purpose entities were actually Enron employees and thence not independent f rom the company. Enron was paying their ac! counting/consulting firm a very large amount of money to ensure that they were able to hide their debt from shareholders. Enron was also either giving consulting contracts to members of their board of directors or members of the board were receiving contributions for their favorite philanthropies raising the question whether they were truly an independent board. In light of all of the above that I self-collected from the...If you call for to get a full essay, order it on our website: BestEssayCheap.com

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