Case Study ENRON - Case Study Enron Corporation 1 The Enron...

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Case Study: Enron Corporation 1. The Enron debacle created what one public official reported was a “crisis of confidence” on the part of the public in the accounting profession. List the parties who you believe are most responsible for that crisis. Briefly justify each of your choices. Answer: a. Enron’s Board of Directors (Headed by Lay and Skilling) : The goal of increasing the company’s stature in the business world is what leads them to the disastrous event of Enron. They tend to be focused on enhancing company’s operating result and set aside ethical principles compromising the interest of stakeholders over their goal. Driven badly by this aspiration, although they are aware of the fact that most of the boards are doing something not in line with the business integrity ignoring such fact is their resolve. Thus, when issue burst executives of Enron lost the confidence of the stakeholders. b. Arthur Andersen and Company (Independent Audit Firm) : Since the responsibility of providing the opinion of reasonableness and faithful presentation of financial statement rest on the audit firm which audited the company their independence and integrity should be questioned. Knowing in the first placed the anomalies behind the company’s report they tend to ignored everything
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  • Fall '16
  • jack
  • audit firm, Enron scandal

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