Enron's Accounting Fraud

Financial Accounting Assignment : ENRONs Accounting Fraud MBA (2011-2013) 1/3/2012 Submitted To: M Jameel Submitted By: Maliha Aziz Butt ENRONs ACCOUNTING SCANDAL INTRODUCTION: Union inherent hired gun Company (the ancestor of ENRON) was established in 1930. In 1979, Inter northerly Inc. bought Northern Natural Gas Company and placed it under a new management. In the 1980s, the United States Congress passed command deregulating the sale of  innate(p) gas. At the beginning of the 1990s, Congress passed a similar legislation targeted at the sales of electricity. These steps launched a new while in the energy market, allowing companies like ENRON to prosper. In 1985, Kenneth Lay, CEO of Houston Natural Gas devised a new company and changed Inter Norths name to ENRON Corporation. This newly formed company was at first involved in distributing gas and electricity in the US and in selling power plants and pipelines worldwide. However, the company started to  take off into many non-energy-related fields i.e. non-core businesses, such as bear derivatives weather insurances for seasonal business, risk management, and internet bandwidth. Even though ENRONs core business remained gas and electricity, most of the company increase came from those non-core businesses.

ENRON was involved in the following fraudulent activities: 1. Fraud to Shareholders 2. fraudulent Accounting Practices 3. Creating off Balance Sheet Entities to Cover-up Losses 4. pretender Energy Crisis 5. Deregulation of ENRON Fraud to Shareholders: When the employees of a corporation on purpose deceive the companys shareholders by misrepresenting information. ENRON was involved in the phenomenon named cook the books, companies cook the books when they dont tell us their real mesh. Managers cook the books and present us fake earnings to improve their earnings per share (EPS) of stocks. Companies cook the books because they have the atmospheric pressure to present good earnings in... If you want to get a full essay, order it on our website: Orderessay

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