MOcampo_Course Project_06.09.2021.docx - 1 Enronu2019s...

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1 Enron’s Scandal Rasmussen University A276/ACG2680 Financial Investigation Roxanne Visser Maria Ocampo May 30 th , 2021
2 The fraudulent activity Enron performed in simple words was keeping liabilities off the balance sheet so that financial statements look good. This act allowed for Enron’s stock price to increase year over year and maintain good investment credit ratings. To keep liabilities off the balance sheet Enron’s executives started to establish special-purpose entities where liabilities were placed. This is generally allowed by GAAP, but companies must consolidate liabilities to one financial statement and Enron did not. Enron filed bankruptcy early December 2001. It became the largest Chapter 11 bankruptcy ever recorded before WorldCom. An approximate 4,000 jobs were lost, and thousands of employees lost their pensions and 401k because they were tied to Enron’s stocks (Thomas, 2002). The total loss was more than $60 billion dollars. The main key players were indicted for numerous counts of accounting fraud. Most of the people involved were

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