This website uses cookies to ensure you have the best experience. Learn more

Demise Of Enron Corporation® And Worldcom®

654 words - 3 pages

RUNNING: Demise of Enron Corporation® and WorldCom®

Demise of Enron Corporation® and WorldCom®
Your Name
October 31st, 2012
FIN/486
Instructor

Enron Corporation and WorldCom
In the last decade, two powerful American companies, Enron Corporation and WorldCom, have become the models of accounting corporate fraud. The Enron Corporation was founded in 1985 by Kenneth Law in Omaha, Nebraska. The company later moved its operation to Houston Texas when InterNorth and Houston Natural Gas merged. This American organization offered paper, pulp, electric, communication, and natural gas manufacturing. Enron employed over 20,000 professionals and reported earnings worth over 100 billion ...view middle of the document...

When the profit came back empty, Enron and WorldCom were unable to pay its employees back leading to one of the biggest financial scandals in United States financial history. Another contributing factor to the demise of these two powerful companies was “creative accounting.” Both companies overstated revenues, profits, misused funds, under estimated expenses, and over stated profit. In addition, to providing investor with misleading information, high ranking individuals were showering in bonuses, and massive kickbacks. Both companies engaged in unethical practices to enhance balance sheets, appear more profitable to investors, and disguise the deep financial trouble. In turn, investors would continue to support and provide more capital which only deepened the misuse of funds.
Role of Business Ethics in Strategic Financial Planning
The lack of business ethics of top executives many companies to bankruptcy have ended in bankruptcy, shame, infamous demise, and most importantly the loss of thousands of jobs. In today’s society the role of business ethics in strategic financial planning has become a primary key to businesses success. In fact, the United States of America had to...

Other Essays Like Demise of Enron Corporation® and Worldcom®

In Both the Uk and the Us, the Prison System Is Being Increasingly Contracted Out to the Private Sector, Often Public Corporations. (the Largest of These Is the Corrections Corporation of America, a...

2059 words - 9 pages  contributed  equally  to  this  report.       In  both  the  UK  and  the  US,  the  prison  system  is  being  increasingly  contracted   out   to   the   private   sector,   often   public   corporations.   (The   largest   of   these   is   the   Corrections   Corporation   of   America,   a   NYSE   listed

Ethical Issues Essay

5638 words - 23 pages organizations. Organization-wide fraud is only possible when these three variables are configured in a way that enables – and even fosters – manipulation and fails to prevent compliance failure. The linkages presented in the diagram above provide managers in other organizations important, yet largely untold, insights into Enron’s demise. (Free, 2007) this also can go for the fall of WorldCom. SWOT Analysis Enron and Strengths • Enron

Corporate Greed

2303 words - 10 pages the scenes. Today, the public furor over corporate greed and irresponsibility is at an all time high. It seems that companies are being exposed daily. Enron and WorldCom are two additional companies that are under public scrutiny and have further exposed the unreliability of corporations. Pick up any paper or business magazine today and Enron will be mentioned somewhere. It is the best example of a culture built on greed and deception to date

Enron Research Case

1987 words - 8 pages , auditors, executives, the public and many other stakeholders are still dealing with the impact of the fallout that came from the misconduct of the debt ridden company. With the exception of a few industries, the stakeholders faced mainly negative benefits from Enron’s demise. Enron business model. Enron Corporation sketched out its roots to the Northern Natural Gas Company, in 1932 in Omaha, Nebraska. It was restructured in 1979 as the leading

Enron Scandal

970 words - 4 pages A CASE ANALYSIS Of Enron SUBMITTED IN PARTIAL FULFILLMENT OF MBAC422: Business & Society Case 2 BY RAHUL DADA 2011H149219 UNDER THE SUPERVISION OF Prof. Anil K Bhat & Dr. Sarvesh Satija Management Department BIRLA INSTITUTE OF TECHNOLOGY & SCIENCE PILANI, RAJASTHAN – 333031 1 Introduction Enron Corporation was an American energy, commodities, and Services Company based in Houston, Texas. Before its bankruptcy

World Com

2028 words - 9 pages WorldCom Case Study Update 20061 by Edward J. Romar, University of Massachusetts-Boston, and Martin Calkins, University of Massachusetts-Boston In December 2005, two years after this case was written, the telecommunications industry consolidated further. Verizon Communications acquired MCI/WorldCom and SBC Communications acquired AT&T Corporation, which had been in business since the 19th Century. The acquisition of MCI/WorldCom was the

Worldcom Financial Fraud

3936 words - 16 pages at non-quarter ending months. It is not known at this time the amount, method, or frequency in which Sullivan affected this account. An additional “creative accounting” tactic was also discovered by pressured employees. WorldCom was under contract with Electronic Data Services Corporation to outsource its network and communication services. “Under the terms of the contract, EDS agreed to minimum commitments for such outsourcing services

Warren Buffet Philosophy

5695 words - 23 pages multinational corporate debacles and the ensuing financial crisis of 2008, stemming from unethical and immoral behaviour of members of the financial industry. The Eclectic Utilitarian framework (McGee, 2007) will be used to examine ethical behaviour pertaining to the demise of Enron, Worldcom and other firms during the economic crisis of 2008. This paper will discuss the importance of ethics in finance pertaining to building trust through 1) shaping

Examine a Business Failure

1156 words - 5 pages company’s future and the tone at the top (management) is crucial to modeling ethical behavior, and if, the top of the hierarchy disregards corporate ethics so will everyone else. Failure of Enron Enron was the United States’ seventh-largest corporation; an American energy company based in Houston, Texas, employing 22,000 people, and was one of the world's leading electricity, natural gas, pulp and paper, and

Worldcom Accounting Tricks

2643 words - 11 pages Communications, Global Crossing, Adelphia, Lucent Technologies, and Enron (which had major investments in internet ventures) have been widely reported.1 As in these other firms, investors in WorldCom have suffered major losses: the market value of the company’s common stock plunged from about $150 billion in January 2000 to less than $150 million as of July 1, 2002. Depending on the outcome of the bankruptcy proceedings, the stock may soon be worthless. The

Enron Ethics

2759 words - 12 pages world's largest companies.According to Barbara Ehrenreich, author of, Nickel and Dime, "Our Corporate CEO's have gone from rocking to reeking in a mere two years. At the height of the dot.com bubble, when they had won distinguished awards--that of ethic and credible "role models" and even "icons", many investors hastened to offer their life savings via the stock market"(p.3). This statement has plenty of credibility, after Enron, WorldCom, Adelphia

Related Papers

Comparison Of Financial Statements For The Sony Corporation And The Google Corporation

1038 words - 5 pages Prof. William C. AudenACC 403Principles of AccountingSubmitted by: Jason K. HauckMODULE 1 CASEIn the following pages I will be discussing several topics to include: the importance of the GAAP (Generally Accepted Accounting Principles), as well as comparing current assets and liabilities to non-current items. I will also review the financial statements for the Sony Corporation and the Google Corporation, locating the balance sheets, income

The Enron Implosion And The Loss Of Respect For The Accounting Profession

5643 words - 23 pages The Enron Implosion and the Loss of Respect for the Accounting Profession On the surface, the motives behind decisions and events leading to Enron’s downfall appear simple enough: individual and collective greed born in an atmosphere of market euphoria and corporate arrogance. Hardly anyone—the company, its employees, analysts or individual investors—wanted to believe the company was too good to be true. So, for a while, hardly anyone did

Ibm International Business Machines Corporation (Ibm) Is The World's Largest Manufacturer Of Information Systems And Equipment. Ibm Produces Computers

2066 words - 9 pages ibmInternational Business Machines Corporation (IBM) is the world's largest manufacturer of information systems and equipment. IBM produces computers that range from large mainframes to portable laptops. The company also offers computer services that help customers operate information system. In addition, IBM supplies such hardware devices as disk drives and printers. It also produces software products for both business applications and consumer

Internal And External Factors Of Yahoo Corporation

991 words - 4 pages Article Reprint Copyright Issues When Using Music in Videos By Barry S. Britt Do you remember many years ago when trying to produce a video for your school took several thousand dollars worth of elaborate and bulky video equipment to make it happen? Now here we are in 2008, and with a very inexpensive digital video camera and some free software, you, yes even you can produce, publish and broadcast your video around the world – how exciting