Abstract On December 2 of 2001, the sixth largest company known as Enron Corporation filed bankruptcy due to accounting ‘fraud’. Enron Corporation was originally known as Northern Natural Gas Company, which was formed in 1931. In 1985, Enron was formed from the merger of Houston Natural Gas Company and Inter North (Nebraska Pipeline Company). Enron Corp. was mainly involved with Power Plants, Pipelines, Electric Utilities, Natural-Gas related business, Pulp and Paper, and other. For six consecutive years (from 1996 to 2001), Enron corp. was named “America’s most Innovative Company” by Fortune Magazine. In the year of 2001, Enron Corp. true identity was revealed. Enron did not report any losses or debt, concluding that Enron’s financial reports were false. Enron’s revenue and profit were the result of massive deals with special entities. These entities were to fulfill temporary objectives which intended to hide financial risk, avoidance of taxes, and boosting profitability of a business. This created an
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This note was uploaded on 04/22/2008 for the course ACCOUNTING 562 taught by Professor Pearcey during the Spring '08 term at UMass (Amherst).