Enron and Accounting

Paper Summary:

This paper discusses the Enron case and what it says about how certain accounting standards were violated. The paper notes how the case involved unethical accounting practices which inflated earnings and spent other people's money, because while the accounting profession is governed by a set of rules to assure ethical conduct, many of these rules were ignored or broken outright by Enron and its accountants.

From the Paper:

"The Enron scandal involved a company that inflated its earnings and so fooled investors, but the scandal also saw executives making a profit while the pensions of employees were dissipated until they were worthless. Examples of unethical behavior in this scandal are many. The issue was made all the more important because of other, similar lapses around the same time as several large companies went bankrupt and left investors stranded. At the heart of these scandals stood unethical accounting practices which inflated earnings and spent other people's money. The accounting profession is governed by a set of rules to assure ethical conduct. Many of these rules were ignored or broken outright by Enron and its accountants. The Enron scandal broke in 2001 when the company made a routine announcement about of $0.43 recurring third-quarter earnings per share."

More papers on Enron and Accounting:

• Analytical Essay # 85624 : "Enron and Arthur Andersen"
• Case Study # 16900 : "Enron and Special Purpose Entities"
• Analytical Essay # 22907 : "Enron and Restoring Corporate Integrity"

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