Enron And The Fall Of The Company

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Enron And The Fall Of The Company

Enron and the fall of the company

Enron was a company that was known by many people and corporation not only in the United States but also around the world. It grew to be one of the largest companies, so as imaged a lot of people were affected by the fall of the company. Over 210000 employees lost there jobs without even knowing what was coming to them and what was going on behind the doors by the people who were running the company. Apart from losing their job, their form of income for their families, they also lost any money that they had invested in shares of the company and their pension funds, because the company encouraged their employees to invest their money in its own shares and also closer to the end they wanted their employees to invest even more money.
Good business decisions are based in financial statements that are prepared by the accounting firms or accountants within a company. When doing account for any company they all follow a standard called GAAP (Generally accepted accounting principles), GAAP provides guidelines and rules which companies use when preparing their financials statements so that all company are on the same page as one another. When Arthur Anderson accounting were preparing the financial statements for Enron they were lying about the financial situation that the company was in, in order to make the company look financial better than they really were. Nobody can really put reasoning behind why they done this but everyone can make assumptions on what was occurring and who was involved and why it all occurred. After Anderson accounting was involved with the fraudulent scandal of Enron and also WorldCom they got themselves a bad name and with a bad reputation hence no other company's would want to do business with them. Those companies that were currently doing business with them would not want to be affiliated with them. When the company had their audit done, they actually would have not been in such deep...
  • Submitted by: martian123
  • Date Submitted: 09/24/2006 08:44 PM
  • Category: Business
  • Words: 1928
  • Pages: 8
  • Views: 347
  • Rank: 69843

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