Question

can you please explain the Enron Case in detail,

in terms of the Ethics involved in this case, the main players, the scam, the whistleblower, the court trial, and how you feel about the sentences which were handed out by the court.

Answer 1

Enron's downfall from one of the biggest name in Wallstreet to a bankrupt company sets an example for companies which do unethical business. The case involved two big names in the matter, they are Arthur Anderson and Enron. Arthur Anderson was the account auditing company for Enron and it was also a renowned name in consulting and auditing business till 2001. When Enron declared its highest loss in 2001 for $618 million and applied for bankruptcy it stimulated the securities and exchange commission to put forth an inquiry against it. The whistleblower for Enron case was Sherron Watkins who was working previously in that company and well attached to the accounting spreadsheets. She found some unethical behavior in accounting statements where she found a lot of accounting frauds. Th company was showing asset loss in crores.Se stepped down from her role and wrote a memo to the chairman about the issue. Enron used a lot of fake energy trading schemes and also it faked its account statements. SEC investigated in the matter when the shares of Enron fall down to $1 from $63 and the investors filed complaints. The court charged and convicted lot of senior executive including the current CEO Skilling. The investigation found the removal of debts from account statements, showing fake profits etc. The court also summoned the audit firm Arthur Anderson for eradicating the facts and hiding the data. The court convicted total 39 people in this case.

As per my opinion, the sentences by the court was justified but the court failed to recover the total money which was around $78 billion. Arthur Anderson was also found guilty in the case which is a fair decision by the law. This made a downfall for the audit company and it made other companies to follow ethical behavior in declaring financial statements.

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