Question

Why do you think the malfeasance at Enron was able to go on for so long, and become so egregious?

Answer 1

Enron took an advantage of the fact that the government had deregulated the oil and gas industry to allow more competition that made it easier for Enron to act fraudulently.
At Enron's officers & employees committed crimes and frauds that were extensive and ongoing - particularly damaging misrepresentations produced inflated earnings reports for shareholders, many of whom eventually suffered devastating losses when the company failed. Also, other instances of dishonesty and fraud occurred; embezzlement of corporate funds by executives and illegal manipulations of the energy market.
Enron’s ability to buy influence and favors at the highest levels of government officials, may have been shielded the company for legal actions including audits for a considerable time. Thirty-five Bush administration officials held Enron stock, and several others were paid consultants to the company. Enron’s institution players ; independent Auditors, Board of directors, Private security analysts, Securities regulators, and Criminal prosecutors with US Department of Justice got fooled and mislead by Enron Corp. The accountants of Arthur Anderson helped Enron achieve the fraud instead of stopping it. Enron didn’t show any warning signs to the investors for any early emergence of fraud symptoms. The incident became egregious only when the symptoms emerged in the consolidated balance sheets under which Enron prepared an amended balance sheet for its investors. Enron’s auditor, Author Anderson undertook the responsibility to work on the company’s amended balance sheet. The correction was valued at $586 million of net income, which translated into a loss of $1.2 billion in owner’s equity. The markets responded accordingly by liquidating Enron’s stocks due to this sudden accounting restatement.