The Accounting Fraud of Enron Company
The corporate scandals have been taking place for centuries whereby it involves corruption, fraud, bribery together with other forms of greedy actions which impacts on economy as a whole and attribute to Company’s failure or impeach of the president or vice president of the Companies involved (Bauer, 2009).
The Company which I choose is Enron Company which deals with commodities, energy as well as being a service corporate. This Company is identified as the Company which turned in centuries since it oozed with the wealth, power and smarts. Certainly, the Enron Corporate involved in a spectacular bankruptcy as a result of painstakingly-planned account fraud which was made by its accounting firm. The accounting firm executive beyond the accounting fraud is known as Arthur Andersen, Jeff skilling who is a CEO and former Ken Lay also a CEO (O’Gara, 2004). The sources indicate that, Enron Company’s shares dropped from $90 to $0.50 thus illustrating a disaster within the financial world. Due to the accounting fraud, thousands of the employees and the investors identified their savings loss within the Company since it had filed an earnings restatement on October 2001. However, the Enron Corporate scandal lead to Chicago based Company to voluntarily relinquish its own licenses to the practice through certified public accountants, the CPA which is preferably in U.S because of the Enron accounting scandal which shows a loss of 85000 jobs as well as corporate rebranding. The accounting fraud of Enron was identified through a turn in by the international whistle-blower Sherron Watkins through high stock prices which had fueled suspiciously.
The fraud players beyond the fraud of Enron accounting were CEO Jeff skilling and the former CEO Ken Lay. The scandal incident resulted in penalty of CEO Jeff Skilling who was sent to prison for 24 years for his roles in engaging in energy giant’s financial collapse. The Company had filed for bankruptcy and Arthur was beyond the accounting fraud therefore he was found guilty of fudging Enron’s accounts and also his attributes to loss of shareholders worth $74 billion of money (Walden, 2007). The other player was Ken Lay was confirmed dead before serving time of the Enron accounting fraud execution. The fun fact beyond the Enron Company shows that, the fortune magazine named the Enron Company the most America’s innovative Corporate for six years preferably in a row prior to its scandal