Day+26-27+Enron+III+27-29+Oct+2010

Day+26-27+Enron+III+27-29+Oct+2010 - Enron III: The Flaws...

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Click to edit Master subtitle style 2/4/11 Enron III: The Flaws In the Enron Model 1. The issue of RISK 2. The role of accounting and Enron’s Global Finance division 3. Internal organizational design revisited
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2/4/11 RISK — the problem: Under Skilling, Enron is increasingly a trading operation Trading is an INHERENTLY RISKY BUSINESS
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2/4/11 It’s your prerogative to run a risky business But if you do, don’t expect Wall Street to be as in love with you as a “high growth” firm Skilling wants it both ways
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2/4/11 accounting reality vs. Reported earnings follow the rules and principles of accounting. The results do not always create measures consistent with underlying economics. However, corporate management’s performance is generally measured by accounting income, not underlying economics. Therefore, risk management strategies are directed at accounting, rather than economic performance. (p. 132)
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2/4/11 WHY IS ACCOUNTING SO COMPLEX? Recent history as seen the
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This note was uploaded on 02/04/2011 for the course SOC 110 taught by Professor Powers during the Fall '07 term at University of California, Berkeley.

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Day+26-27+Enron+III+27-29+Oct+2010 - Enron III: The Flaws...

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