Enron Scandal Essay

Accounting scandals are political or business scandals which arise with the disclosure of financial misdeeds by trusted executives of corporations or governments. These days, not too often, these scandals are splashed as headlines across media. Why? Because there are complex groups of stakeholders who might be seriously affected by the scandals. Enron scam was the most remarkable scandal in 20 centuries by their institutionalized, systematic, and creatively planned accounting fraud. The scandal also brought into question the accounting practices and activities of many corporations in the United States. The scandal also affected the greater business world by causing the dissolution of the Arthur Andersen accounting company. This report will reveal the whole story of Enron scam and auditors role from the situation in more depth. It will also include the current situation of those responsible for the fraud. 2. Background of U. S in 1990s The 1990s of U. S were a time of prosperity and this prosperity period is originated from growth in IT corporates and in accordance with increase in productivity as technology develops with IT. In the mid- to late-90s, society’s expectations of what the Internet could offer were unrealistic. Many investors foolishly ignored the fundamental rules of investing in the stock market and instead, investors and entrepreneurs became preoccupied with new ideas that were not yet proven to have market potential. Furthermore, they ignored the blatant signs that the bubble was about to burst. (IT Bubble in 90s) There are two main reasons for the bubble; with investors` optimistic expectation, there were a lot of ‘Window dressing’ in accounting. As Enron collapsed, the growth of the tech sector proved to be illusory, and bubble started to sober. 3. Enron- who are they? Enron Corporation is an energy trading, communications company which was formed in 1985 based in Houston, Texas. Enron marketed electricity and natural gas, delivered energy and other physical commodities. Company branched into many non-energy-related fields as well, including such areas as high-speed Internet bandwidth, and financial and risk management with 21,000 employees at mid-2001. The company reported revenues of $101 billion in 2000. It has stakes in nearly 30,000 miles of gas pipeline, owns or has access to a 15,000mile fiber optic network and has a stake in electricity generating operations around the world. 4. Enron- what they did? The Enron fraud case is extremely complex. There are several main characters who are spearheading the Enron scam. One of them was Jeff Skillng. Jeff Skillng, who was a consultant in Mckinsey, took charge in consulting Enron. He found problems and also potentiality of Enron and he proposed the idea of â€Å"gas bank† to Enron, which is a system that is combining financial system and gas supply and demand system, and taking the margin from the two system(as bank does). This was an ideal idea in theory and Enron asked him to take charge for this business, and later he became the president of Enron’s trading operations. Also, he convinced federal regulators to permit Enron to use an accounting method known as â€Å"mark to market. † Using this method allowed Enron to count projected earnings from long-term energy contracts as current income. This was money that might not be collected for many years. It is thought that this technique was used to inflate revenue numbers by manipulating projections for future revenue. The problem is that it doesn`t match realised profit and real cash flow. especially, Enron`s main trading was long term future contract which is hard to make valuation for the future. Use of these techniques made it difficult to see how Enron was really making money. The numbers were on the books so the stock prices remained high, but Enron wasn’t paying high taxes. When the telecom industry suffered its first downturn, Enron suffered as well. Eventually, the house of cards began falling. When Enron’s stock began to decline, the Raptors began to decline as well. On August 14, 2001, Enron’s CEO, Jeff Skilling, resigned due to â€Å"family issues. † Enron chairman Ken Lay stepped in as CEO. 5. One example of fraud Enron`s â€Å"too much Off-Balance Sheet Transactions† Enron used â€Å"off-balance-sheet†technique for anytime, for many purposes, because it would enable Enron to present itself more attractively as measured by the ratios favored by analysts and investors. Skillng used securitisation to supply more liquidity and also to clean up the assets that is hardly generating income from it. He also hided most of the debt by securitisation. So, Enron needed Special purpose entities(SPE) for the securitization purpose. JEDI was one of the SPE. California PERS and Enron invested by $25000m each. As soon as the JEDI established, Enron started to sell energy related stock to JEDI and it grew JEDI by 23% per year on average. It made Skillng`s ECT business bigger and bigger. 6. Consequences for the stakeholders The key stakeholders affected by the collapse of Enron were its employees and retirees. Stakeholders and mutual funds investors lost $ 70billion market value. Banks were also affected by the meltdown of the company. Not only the stakeholder and bondholder lose out, the confidence in the company also fell. This was the major setback for the company. The actions of Enron management left a deep scare for its 4000 employees which lost out their jobs and also impacted others around them. Some blamed Arthur Andersen; Enron’s accounting firm and some blame the board of directors for insufficient oversights. The damage was so big that it was likely to take years for the court to sort the wreckage. The company did not think of its future and took many bad steps just to earn money. The CEO should have looked into the company matters long time ago and took action so that hundreds of jobs could have been saved. The companies who were associated with the big firm were affected on a very large scale. This was the biggest bankruptcy of a firm with $63. 4 billion in assets. 7. Auditors in this scandal, and their role The external auditing body of Enron company was Arthur Anderson LLP, formerly one of the ‘big 5’ accounting firms, providing auditing, tax, and consulting services to large corporations. Andersen definitely Knew Enron Was in Trouble but they overlooked at it and even conspired with Enron to manipulate the financial statements. They knew Enron was in trouble as early as Feb.  2001, a company memo showed, and Andersen debated dropping the collapsed energy firm all together, Reuters reported. Additionally, Andersen knew in mid-August of a senior Enron employee’s concerns about improprieties in the energy company’s accounting practices. Andersen confirmed that a memo dated Feb. 6 recounted a meeting between Andersen executives about whether Andersen should retain the now-bankrupt Enron as a client. Auditors are responsible directly under the law especially the international standards to report directly to the shareholders on the status of the company’s or a bank’s account at a particular point in time. They heavily misconducted as auditors as they received money and hided about Enron`s truth. 8. Ramifications It is not easy to implement rigorous standards without changing Incentives. This situation can be seen in South East Asian countries like: Singapore, Thailand, Hong Kong, China. Each country can implement its own accounting standards, but did not implement the substantial institutional changes required to make these standards effective. According to various studies conducted in this area, new standards did not result in better-quality financial reporting.9. Conclusion: In search of better standards and ethics The ENRON Scandal is considered to be one of the most notorious within American history; an unofficial blueprint for a case study on White Collar crime. Enron’s behaviour has confirmed that the treatment of off-balance-sheet dodge, American accounting standards are too lax. It is time for another effort to realign the system to function more in shareholders’ interests. Companies need stronger non-executive directors, paid enough to devote proper attention to the job.

Language and atmosphere Essay

Analyse the importance of chapter one of Great expectations with regard to character, plot, theme, language and atmosphere  In modern society, when our children feel boredom creeping over them, they can turn to the technological wonders of our time, such as computers and televisions, and other gadgets and gizmos that have become commonplace in everyday homes. However, in 1861, the time of the great Charles Dickens, there were no such contraptions, and so children and adults alike turned to the entertainment that books had to offer, and would lose themselves in worlds of imagination, fantasy and the impossible. Dickens’s Great Expectations is an excellent example of 19th century literature and was even published by serialization in Dickens’s own magazine; ‘All the year round’. It is a bildungsroman tale that tells the story of a young, poor boy, who is known throughout the novel as ‘Pip’, that has fantastic, and eventually realised dreams of b ecoming a respected gentleman. In chapter one, we are introduced to the rather ‘larger than life’ character Magwitch, the stereotypical criminal who the Victorians all love to hate. Our first impression of Magwitch is, just as Charles Dickens intended, of a frightening and dangerous man whose â€Å"terrible voice† terrifies Pip and immediately turns us, the readers against him. Dickens does this to reinforce the fact that he is, after all, a criminal, and to highlight the clichd views of the general public. This could even be viewed as bitter sarcasm, as, although Dickens is bowing to the public mood, he makes it clear for those who look more closely that he does not share the same opinion. On the other hand, Magwitch is also shown in a comical light, â€Å"I wish I was a frog. Or an eel!† and we even see a kinder and more vulnerable side, â€Å"a man who had been soaked in water, and smothered in mud, and lamed by stones†¦who limped and shivered.† The author shows us these different qualities so that we can obtain a greater understanding of the character and view him in a fairer, more sympathetic light. In addition to this, Dickens gives us subtle hints throughout the chapter that Magwitch, like all people shows weakness; â€Å"he hugged his shuddering body in both arms† and, through Pip’s narration; â€Å"A man whose legs were numbed and stiff†, he tries to make us feel that perhaps even criminals deserve a second chance to be respected pillars of society. It is very important that Magwitch is introduced in the first chapter, rather than a later chapter, as this establishes tension and atmosphere, and creates a compelling hook that will ensure that the following chapters continue to be purchased. And of course, adding a typical â€Å"bad guy† to the equation gives all readers, particularly of the Victorian era, a desperate need to see him beaten! Possibly the most important role that Magwitch plays in Great Expectations is that of the ‘instrument of justice’. When we first meet Magwitch, he is intimidating Pip in the churchyard, and shouts at him that he will only stop his dangerous accomplice from harming him, if he brings him food. When Pip fulfils his end of the bargain, Magwitch returns the favour, only years later, becoming Pips benefactor and enabling him to start a better, wealthier life. Magwitch, however, is not shown justice, as after months of supporting Pip, he is captured, thrown in a jail cell, and later dies of exhaustion. Once again, this underlines the harsh views of the Victorians and the severe attitude towards criminals in the 19th century. We are also introduced to Pip in the opening chapter; the main character in Great Expectations, and the novel’s narrator. The story opens with him remembering himself as a boy, standing alone and crying in a churchyard near the marshes; â€Å"the small bundle of shivers growing afraid of it all and beginning to cry, was Pip†. Dickens depicts him as a harmless, caring boy, so as to draw sympathy from the reader, even though at that point in the story, Pip is content with his common life. When Magwitch is introduced, the narrator Pip presents an interesting relationship between himself and the bullying man. At first, the relationship appears to be based solely on power and fear. The man yells at Pip to get what he wants, a file and some food, and Pip responds, only because he fears for his life. And yet, after they part, the young Pip keeps looking back at the man as he walks away. The image of Magwitch holding his arms around him is remarkably familiar to the initial image of young Pip, holding himself in the cold, alone in the churchyard with the stones of his dead parents. For a moment, the relationship seems to warm. They share a common loneliness, the orphan and the escaped convict. Even while he is afraid, Pip instinctively displays a sympathetic reaction. This initial meeting, between a small boy and a convict, will develop into the central relationship in the book, which will cause Pip’s great expectations of himself to rise and fall. The author’s decision to assume the character of Pip, and therefore write using first person narrative, proves to be very significant in the development of the story.

Affirmitive Action Essay

Affirmitive Action Essay Have you ever wondered who gets to attend the countrys selective colleges and universities? The really smart kids, the hard workers, star athletes, artists, singers, mathematicians, writers, alumni children? Of course universities want them all. But what about when it comes to race? Suddenly the stakes of getting in are raised. How many African Americans, Hispanics, Asians, and Whites should there be in each class? Should acceptance to a school depend on a persons race?Well I believe that acceptance to a school shouldnt be depended on the race of a person. I believe this because its like judging a book by it cover, it doesnt always work out. Let me give you an example just because youre Asian doesnt mean that youre going to be smart, know how to fix a computer, or be a crappy driver. Actually we should all be thought of equals and our race shouldnt matter in being accepted into a college. Colleges shouldnt administer students onto there campuses to keep diversity, but let their capability determine their entrance. College admissions should be determined by academic performance/capabilities instead of ones ethnicity just to increase diversity in the college atmosphere.However, there is another side to this raging debate over affirmative action. There are a more then a handful of minorities that are qualified for admission, but need that extra help affirmative action grants in order to get admission into that top tier university. Some of these people come from economically challenged backgrounds, they meet the requirements that universities require, but do not excel as some of more competitive students that apply. In these type of situations affirmative action, grants admission to the economically challenged student, rejecting the more qualified one. But who are we to say that the kid from the wrong side of tracks, that was raised with seven brothers and sisters, most of whom havent been to college; doesnt disserve his chance to be the first in his family over the pure bread tutored child? For an ethnic minority, the difference between a junior college and UCLA can be cataclysmic. To summarize my opinion regarding affirmative action; I am not supportive of it even though I am a minority. However, I do realize that it does aid some of those in disadvantageous circumstances a chance at colleges they normally would have a difficult time getting into with an average GPA (competing mostly with 4.0s).

Information Technology (MIS) Essay Example | Topics and Well Written Essays - 250 words

Information Technology (MIS) - Essay Example Users can use blogs, wikis, podcasts, social networks, and online marketing, to view, review, comment, share, upload, download, and debate on controversial topics. Web 2.0 technologies can also be used in business world through applications that provide a collaborative platform to businessmen, where they can collaborate with their partners and customers right from their offices and homes. So, the reader comes to know that we are using machines while becoming machines ourselves. I totally agree with Wesche because I believe that it is actually we who are the Machines, because it is we who tell the machine what to do. But at the same time, the machine is also using us, by making us collaborate with the world. The reference to digital ethnography helps explain how technological advancements have changed our lives entirely. The video is very informative and entertaining, and the way Wesche has used digital text and dynamism is wonderful. The use of technical terms and their description i s very informative for a

Recycling in Australia and China Essay Example | Topics and Well Written Essays - 1000 words

Recycling in Australia and China - Essay Example In fact, many Chinese people are relying on garbage and unwanted materials in order to make both ends meet everyday (Jazeera, 2010). The ultimate goal of China is to create a big industry for its recycling industry, but Australia is more into regulating the balance flow of its materials economy. One important distinction between Australia’s recycling industry and China’s can be depicted in their major objectives towards their recycling programme. Both of these countries seek to optimise the full advantage of the proper handling of waste materials that in return will help sustain their economy. As a result, common to their strategy when it comes to their varying recycling programme is their goal to achieve economic sustainability. In Australia for instance, the Australian Council of Recycling (ACOR) seeks to achieve efficient, sustainable materials economy. Part of this organisation’s function is to help the government addressed society’s internal issues to wards the handling of their waste materials. In China, there is a remarkable recycling market. ... y Unlike Australia, China is still in its infancy stage when it comes to organising its entire recycling industry that is why it needs to come up with relevant incentives and motivating forces to influence the stakeholders (Mo et al., 2009). Australia is highly organised when it comes to its implementation process on its recycling programme. This is due to various collaborations of its stakeholders which eventually have resulted to positive support and impact on its entire recycling industry. Remarkably, unlike China, Australia has become so focus with sufficient time to concentrate on specific objectives. For instance, to ensure maximisation of recovery and re-use, copper and zinc recycling in Australia are targeted to reach in their discard flow by about â€Å"105% and 155% to 150 Gg Cu/year and 145 Gg Zn/year† (Beers and Graeded, 2007). Furthermore, upstream and downstream sorting of residues is an integral part of Australia’s policy instrument for recycling. Part of this is to manage wood waste which has â€Å"taken a large amount of landfill space† and is said to contribute to â€Å"global warming as the process of decomposition takes place resulting to the emission of carbon dioxide and methane gases† (Taylor et al., 2009). These clearly indicate that Australia has clear and specific goals in its overall plan for its recycling strategy. In addition, there were â€Å"Industry-led initiatives collaborating with national government: Australia’s National Packaging Covenant ensures market for new materials recovered from recycling; Aluminum can industry helps encourage the community for recycling by paying people for using aluminum cans delivered to the centre; drumMuster helps to initiate collection of empty, cleaned and non-returnable crop protection and animal health

Question Essay Example | Topics and Well Written Essays - 500 words - 1

Question - Essay Example Included in the record are "Age range", "Disabilities", "Education/skills", "IT knowledge", "Frequency of use" and "The key interface requirements suggested by the profile". Creation of List: - The System creates a holiday list after every insertion. The list summarizes the holidays and various packages. It also includes full customer information, information on the trade-in benefits (if any), the trade-in allowance, and information on the purchased package. The invoice may contain details of the Options selected by the customer or no options. The Options have a code. The customer choices are being put on the invoice after the Salesman fills the digital form with the code of the selected option. No selection of Code means no option has been chosen by the Customer. Creation of Customer ID: - If the customer buys a package for the first time, his details are being recorded for future use for promoting sales. The customer is given an ID and so that the same can be used for data storage and retrieval. Creation of list of Options with each option being given a Code: - The Dealer provides lots of options to its Customers and these can be identified through the list of features and Option Code. Each Option has been pre stored in the database.

Creating a Plan for Positive Influence Essay Example | Topics and Well Written Essays - 1000 words - 2

Creating a Plan for Positive Influence - Essay Example In order to be able to invoke a motivated, well allied team, we will have to generate an inspiring milieu in which it can toil also discover victory. This implies making sure that every affiliate of the team is aware of the reason that the team is existent to support. If we are able to clearly define the mission to the team members they would be able to recognize the broader perspective. It ought to clearly affirm the final purpose that the team members need to work towards. Being able to convey this to the members of the team implies being able to motivate the team, in addition to also helping them concentrate on it. - Reverence for one other: This consists' of vigorous listening, giving opinion, also respecting variety with reference to the morals, expertise, and forte of every team member. Vigorous listening is one of the most influential announcement tools anybody can implement. - Variance management: Though a lot of individuals are hesitant to it, variance can now and then be an ingenious force, adding new thoughts and vigor to a team. Ingenious conflict desires daring and directness, though; unreceptive argument ought to be kept away. Instituting strategies for administering a conflict is essential. - Taking decisions: If there is a difference of opinions in opinions, the resolution mechanism should be designed beforehand. The leader of the team will have some influence over the decisions but the team members. - The management of time along with the obligation: This may perhaps take in a principle heartening punctual onset at the meetings, or else daunting diversions throughout the team actions, like the usage of mobile phones or else other handheld devices (Drillings, 1994, pg 149). Comprehending the team member's viewpoint towards motivation, satisfaction and performance: Each and Every individual's sagacity of remuneration as well as satisfaction for their input to a team exertion will be diverse. It is significant to categorize this for every team affiliate so that the responsibilities can be given away efficiently also suitably. A few team members might have a distress in mounting new potential, in which case they might wish for a task that is not within row with their practice. This will call for added maintenance also training from the team leader. A few others may possibly favor a team task that boosts their skill within a specific region. An efficient leader can assist team members in looking for a role with which they are relaxed by providing deliberation on their potency as well as practice. Allocating tasks In order to work efficiently and competently, a variety of tasks have got to be crammed. If everybody is after breeding thoughts, there will be no one to realize them. If everybody is anticipating to be enthused, no motivation will take place. The complete variety of task responsibilities have to be allocated to make sure that the entire execution procedure is enclosed, from thought formation to liberation as well as conclusion: The individual goals ought to be: - Precise - Computable -

Small business Essay Example | Topics and Well Written Essays - 1000 words

Small business - Essay Example Besides, the youth, the business also targets those who are health conscious by using only fresh foods in making their meals. Over the years the world over has had to deal with many health issues as a result of the diets majority of people choose. The fast foods that the bulwark of the UK population consumes have become their health detriment. Diseases like cancer, hypertension and diabetes have merged with weighty issues like obesity and cardiac arrests among others to terrorise people all over the world, including the UK. There is a call for people to turn to organic products and eat healthier foods to avoid these health risks (Organic food directory, 2008). The Northern Nosh had this in mind and that is the reason behind the healthy food production bit in the mission statement. Majority of the food vendors in the festivals do not consider the health of their clientele and as such sell fast foods but as a business we intend to incorporate this in our products and services. Northern Nosh is determined to do this by acquiring only fresh food from the Northern parts of UK and other fresh food suppliers. Con sidering that there is a lot of pressure for people to eat more fresh foods and organic ones for that matter instead of the genetically modified foods, Northern Nosh potentially enhances the aspect of healthy living. This healthy food aspect is also indirectly reduces the number of competitors for the Northern Nosh business as majority of the food vendors sell the fast foods which are not so healthy. We are of the view that the young people will be attracted to the fresh and healthier meals once they know it is organic and without so many rivals the Northern Nosh is likely to succeed. Apart from the healthy foods being sold, the business also plans to sell its products at reasonable enough prices for their clients to afford. With the surge of campaigns for organic foods against the genetically modified ones, the business looks forward to making profits.

Comparison and Contrast between life before internet and after Essay - 2

Comparison and Contrast between life before internet and after internet - Essay Example Likewise, telephonic messages that actually came into existence before internet helped people in conveying messages from one place to other regardless of geographical location. This particular fact provides evidence that life of people before and after internet has been quite similar in relation to the messaging system. This is because the system of exchanging messages through text messages and mails tends to be quite similar. Internet has resulted in changing peoples’ life pattern, however, the rudimentary social pattern of life has remained the same irrespective of the changes induced by internet. It has been revealed that the communication system of youngsters have persisted to be the same i.e. most of them use the conventional means of social interaction wherein internet is executed like a telephone.Therefore, it can be affirmed that the life of people before internet and after internet has remained the same in relation to their social interaction process and psychological well-being. In fact, internet has created a platform for enhancing the traditional interaction process along with evolving relationships amid individuals in the society. Thus, the social and psychological paradigms of peoples’ life have been quite similar before and after the initiation of internet. On the contrary, there has been a huge difference in the life of people before internet and after internet. People in order to entertain themselves used to devote more time to watching television or through other means such as visiting parks.