Enron, an energy distributing company was in a partnership with Arthur Anderson, an accounting firm.

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Enron, an energy distributing company was in a partnership with Arthur Anderson, an accounting firm.

The Enron scandal, publicized in 2001, led to the bankruptcy of the Enron Corporation, an American energy company based in Houston, Texas, and the de facto dissolution of Arthur Andersen, which was one of the five largest audit and accountancy partnerships in the world. In addition to being the largest bankruptcy reorganization in American history at that time, Enron was cited as the biggest audit failure.

Enron shareholders filed a $40 billion lawsuit after the company's stock price, which achieved a high of US$90 per share in mid-2000, plummeted to less than $1 by the end of 2001.The U.S. Securities and Exchange Commission (SEC) began an investigation, and rival Houston competitor Dynegy offered to purchase the company at a very low price. The deal failed, and in December 2001, Enron filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code.

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