Location via proxy:   [ UP ]  
[Report a bug]   [Manage cookies]                
Scribd Logo
Upload

Welcome to Scribd!

  • 371 views

    Enron Scandal

    Uploaded by

    boldfaceaxis
    This document discusses the rise and fall of Enron, a major American energy company that collapsed in 2001 due to widespread corporate fraud. It provides a timeline of Enron's formation in 1985, its rapid growth and success through the 1990s as it shifted focus to energy trading, and its ultimate bankruptcy in late 2001 after reporting billions in losses and admitting to widespread accounting fraud. The document then examines the corporate governance failures at Enron that allowed this fraud to occur for many years, including conflicts of interest, lack of oversight by the board of directors, and dishonesty by top management.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd

    Enron Scandal

    Uploaded by

    boldfaceaxis
    371 views16 pages
    This document discusses the rise and fall of Enron, a major American energy company that collapsed in 2001 due to widespread corporate fraud. It provides a timeline of Enron's formation in 1985, its rapid growth and success through the 1990s as it shifted focus to energy trading, and its ultimate bankruptcy in late 2001 after reporting billions in losses and admitting to widespread accounting fraud. The document then examines the corporate governance failures at Enron that allowed this fraud to occur for many years, including conflicts of interest, lack of oversight by the board of directors, and dishonesty by top management.

    Original Description:

    Related to enron scandal

    Copyright

    © © All Rights Reserved

    Available Formats

    PPTX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    This document discusses the rise and fall of Enron, a major American energy company that collapsed in 2001 due to widespread corporate fraud. It provides a timeline of Enron's formation in 1985, its rapid growth and success through the 1990s as it shifted focus to energy trading, and its ultimate bankruptcy in late 2001 after reporting billions in losses and admitting to widespread accounting fraud. The document then examines the corporate governance failures at Enron that allowed this fraud to occur for many years, including conflicts of interest, lack of oversight by the board of directors, and dishonesty by top management.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    371 views16 pages

    Enron Scandal

    Uploaded by

    boldfaceaxis
    This document discusses the rise and fall of Enron, a major American energy company that collapsed in 2001 due to widespread corporate fraud. It provides a timeline of Enron's formation in 1985, its rapid growth and success through the 1990s as it shifted focus to energy trading, and its ultimate bankruptcy in late 2001 after reporting billions in losses and admitting to widespread accounting fraud. The document then examines the corporate governance failures at Enron that allowed this fraud to occur for many years, including conflicts of interest, lack of oversight by the board of directors, and dishonesty by top management.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 16

    ENRON

    CORPORATE
    GOVERNANCE FAILURE
    Name:
    Himshikha 22
    Kirti Patidar 26
    Manvender Dagar 31
    Tushar Pantawane 44
    Vandita 45

    ENRON'S RISE AND FALL


    1985

    Formed By Kenneth Lay in 1985 by merging Houston Natural Gas and Internorth

    1990

    Enron hired Jeff Skilling who had helped Enron develop its Gas Bank idea calling for the
    firm to become an intermediary between suppliers and end-users in the natural gas market.

    1999

    By the close of the nineties it was clear that trading operations had become Enron's primary
    focus and the firm began systematically shedding its physical assets following what it
    referred to as an asset light strategy.

    ENRON'S RISE AND FALL


    2000

    The company's annual revenue reached $100 billion US.

    It ranked as the seventh-largest company on the Fortune 500 and the sixthlargest energy company in the world.

    The company's stock price peaked at $90 US.

    Much of this increase was attributable to the creation of EOL and Enron's method
    of accounting for trading revenues

    ENRON'S RISE AND FALL


    2001

    Cracks began to appear In August of that year, Jeffrey Skilling, announced his
    departure, and Lay resumed the post of CEO.

    In October 2001, Enron reported a loss of $618 million its first quarterly loss in
    four years.

    On Dec. 2, 2001, Enron filed for bankruptcy protection. Roughly 5,600 Enron
    employees subsequently lost their jobs.

    The next month, the U.S. Justice Department opened its investigation of the
    company's dealings, and Ken Lay quit as chairman and CEO.

    ENRON'S RISE AND FALL


    2002

    On Feb 14, 2002, Sherron Watkins, the Enron whistleblower, testifies before a
    Congressional panel against Skilling and Lay. Sherron Watkins is an Enron vice
    president. She wrote to Lay in the past expressing concerns about Enron's
    accounting practices.

    THE MASTER MINDS

    CORPORATE GOVERNANCE:
    WHAT IS CORPORATE GOVERNANCE?

    The corporate governance is a set of systems , structures ,processes and mechanisms by


    which a corporate entity is led, directed and controlled in the best interests of shareholders
    and other stakeholders.

    Corporate governance rules are primarily applied on listed joint stock companies and other
    financial institutions taking the form of joint stock companies.

    CORPORATE GOVERNANCE PRINCIPLES

    Effective Corporate Governance Framework

    The rights of shareholders

    The equitable treatment of shareholders

    The role of stakeholders in corporate governance

    Disclosure and transparency

    The responsibilities of the board

    WHAT LED TO THIS?

    Conflict of Interest

    Lack of attention by Board of Directors

    Lack of truthfulness by management about the health of the company

    Information Asymmetry

    The greed, dishonest, arrogance, selfishness, hypocrisy, disrespect and injustice of top
    management

    CORPORATE GOVERNANCE ISSUES

    Lack of internal control

    Neglect of integrity capacity by managers

    Complex dubious energy trading schemes

    Complex Dubious Accounting schemes

    Use of SPEs to hide bad bets

    LESSONS FROM ENRON SCANDAL

    Demonstrated the importance of old economy questions: How does the company
    actually make its money ?

    Is it sustainable ? Is it legal

    Demonstrated the need for significant reform in accounting and corporate governance

    Importance of ethics in long run

    Importance of proper controlling and reporting

    AS A RESULT

    Sarbanes-Oxleys Law 2002


    Public Company Accounting oversight Board
    Auditors Independence
    Corporate Responsibility
    Enhanced Financial Disclosures
    Analyst Conflict of Interest
    Commission Resources and Authority
    Crime penalty and accountability Enhancement
    Corporate tax returns

    THANK YOU
    Please Ask
    WHY?

    You might also like