Enron case study accounting
Enron case...
August 29th, 2015
News broke in October of 2001 that energy conglomerate Enron was declared insolvent; the story that followed revealed the largest case of accounting fraud in history.
Enron case study accounting
As a result, Enron declared bankruptcy and one of the nation’s largest accounting firms Arthur Anderson was forced out of business. Analysts were shocked to discover how long Enron had been able to manipulate its reported earnings without discovery by auditors or the board of directors (Catanach.
2012).
Today it is still uncertain whether auditors from Arthur Anderson’s Houston office were compensated to overlook the numerous accounting discrepancies or instead, simply unqualified to decipher the unique accounting procedures developed by the Enron management.
The catastrophic loss to shareholders and employees pensions serves as a warning to auditors of the devastation that inadequate accounting procedures can cause (Mclean. 2001).
As a result of the intentional manipulation of reported profits, si