Professional Documents
Culture Documents
Company Background
Inter North + Houston Natural Gas In 1985 Headquarter in Houston
The Scandal
Grew unexpectedly quick
$100b revenues 90$ share price
Systemic Issues
Causes outside the company that drives people to do something.
1. 2. 3. Laws and regulations that provide the framework in which people act ; Economic and social institution that give meaning and direction to the public and ; Culture that shapes the values and perceptions of people and groups.
The U.S. Securities and Exchange Commission allow Enron to use the mark to market The Legal structure allowed Auditing firm to Audit and offer consulting services - Leads to Conflict of Interest The legal structure and accounting rules allow Enrons
Enrons executives set up Special Purpose Entities which enable Enron to hide its enormous debt.
firm
Insider trading
Dishonest and Lacked Integrity : concealed Enrons massive debts through questionable accounting.
Urged shareholders to buy more shares He quietly sold much of their Enron stock.
failed to comply with the conceptual frameworks faithful representation. full disclosure principle 45 year sentence died 2006
concepts which highlight his failure under realization and full disclosure principles