Enron Company’s Audit Ways
Ten years after the fall of Enron, much has changed about Company’s audit ways. The Enron scandal has been used as a clear symbol of how fraud and accounting malpractices can affect the performance of a company. The scandal also brought the accounting methods that are questionable into perspective. The fall of Enron led to the formation of Sarbanes-Oxley Act of 2002.
This act regulated companies against such kinds of accounting malpractices. The scandal led to the closure of Arthur Andersen accounting firm. The firm was the main auditing firm for Enron Corporation. After Enron filed for bankruptcy in November 2004, a new board of directors took it up. The new board of directors changed the name to Enron Creditors Recovery Corporation.
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The board of directors reorganized and liquidated its operations and assets. Enron sold Prisma Energy International Inc. on September 2007 to Ashmore Eergy International. Any strategies have been put into place to try reviving Enron Corporation. With its bad past records it is becoming difficult for the new directors to attract new and old investors to the Company. Most of the investors had lost confidence in the corporation and so were unwilling to invest back (Conrad, 2010).
This is making it hard for Enron to pick up its pieces.Personal Opinion Enron Corporation downfall should not be blamed on the two top executives. A company’s downfall is contributed by a series of illegal acts that are practiced by the top executives. However, I believe the other employees of the company should have taken it to be their business and reported their suspicion to the authorities. By doing so, they would have prevented the complete collapse of Enron. They would in turn nnot have lost their jobs.
A company’s well being is a result of communal and joint responsibility. By each employee taking personal responsibility of their work, major scandals will be witnessed at work. ConclusionEnron’s Fall is an open secret because everyone now is aware of the illegal accounting acts that were being practiced at Enron. The well kept secrets that Skilling and Furrow hid from the public are now open for all to know. They lied to the media about the real financial situation of Enron just to be able to commit fraud without anyone detecting it.
Everything that is done in the dark will eventually come to light. Companies must ensure to have good company’s policies and regulations that they should always adhere to. According to (Ramage 2005), transparency is also a key issue when it comes to the financial matters.