Enron and Creative Accounting Research Paper by Master Researcher

Enron and Creative Accounting
A look at the impact of Enron's business and financial practices.
# 40139 | 3,400 words | 4 sources | APA | 2002 | US
Published on Oct 07, 2003 in Business (Accounting) , Business (Companies) , Accounting (Fraud)


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Description:

This paper investigates the "creative accounting" practices utilized by Enron in respect to the leadership of the company, its group dynamics, and its ethics and politics. The paper shows how while Enron certainly harmed many people in the short- term, the impact of its accounting and ethics practices will have lasting long- term effects throughout the business community.

Outline:
Introduction
The Fall of Enron and "Creative Accounting"
Creative Accounting and Enron's Leadership
Group Dynamics within Creative Accounting at Enron
Ethics and Politics in Respect to Creative Accounting at Enron

From the Paper:

"The decision to use creative accounting practices stemmed directly from the leadership at Enron, where in 1985 the co- creator of the energy giant resigned and was replaced with Ken Lay. Lay, it is believed, is responsible for helping develop the business strategies that enabled Enron to acquire other energy businesses and the unique market of energy brokering, which simply is the sale of energy that Enron nor its subsidiaries produced. Lay himself has remained on the board of Enron but was replaced as CEO by Jeff Skillings, who then resigned after less than a year on the job. Lay again attempted to take control of the company. This, suggest investors, in retrospect should have been a warning to the leadership situation in Enron, where this rapid transition indicated some form of internal controversy.
"However, despite the fact that Enron began as a solid company with a direction towards international business strategies, the leadership at Enron only truly decided to begin using creative accounting strategies in 1997. The Houston Chronicle reports that: "The energy giant said it is restating its finances as far back as 1997 to account for losses related to a number of complex partnerships, including several under investigation by the Securities and Exchange Commission. This includes a $586 million reduction in net income, an additional $2.5 billion in debt and a 77- cent reduction in earnings per share." (Fowler: A1)"

Cite this Research Paper:

APA Format

Enron and Creative Accounting (2003, October 07) Retrieved February 02, 2023, from https://www.academon.com/research-paper/enron-and-creative-accounting-40139/

MLA Format

"Enron and Creative Accounting" 07 October 2003. Web. 02 February. 2023. <https://www.academon.com/research-paper/enron-and-creative-accounting-40139/>

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