RESEARCH ON ECONOMIC DOWNFALL OF ENRON

Jul 8th, 2015
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Research based on the the how the Enron scandal occurs .What are the issues which become a cause a such an enormous economic disaster , Who is responsible for Enron Scandal and What are the features which keep in dark to misinterpret stake holders The Enron scandal, revealed in October 2001, eventually led to the bankruptcy of the Enron Corporation, an American energy company based in Houston, Texas, and the dissolution of Arthur Andersen, which was one of the five larges audit and accountancy partnerships in the world.

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Assignment 1 Part a RESEARCH ON ECONOMIC DOWNFALL OF ENRONIntroductionResearch based on the the how the Enron scandal occurs .What are the issues which become a cause a such an enormous economic disaster , Who is responsible for Enron Scandal and What are the features which keep in dark to misinterpret stake holdersSignificance of ProblemThe Enron scandal, revealed in October 2001, eventually led to the bankruptcy of the Enron Corporation, an American energy company based in Houston, Texas, and the dissolution of Arthur Andersen, which was one of the five larges audit and accountancy partnerships in the world. In addition to being the largest bankruptcy reorganization in American history at that time, Enron was attributed as the biggest audit failure .AnalysisEnrons non transparent financial statements , Complex business Model , Unethical practices and Creative accounting to misrepresents earnings and modify statement of financial position to portray a favorable depiction of its performance. The combination of these issues later led to bankruptcy of the companyEvaluationRevenue recognition is main tool that an Enron's Directors use in order to overstate company profit and assets .Between 1996 to 2000 Enron's revenues increased by more than 750%. This extensive expansion of 65% per year was unprecedented in any industry including energy industry which typically considered growth of 2-3%.Secondly Enron continued to recognize future

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