Enron Corporation's journey from a top energy company to its collapse due to an accounting scandal is a tale of corporate malfeasance. The company's aggressive culture under CEO Jeffrey Skilling and the use of dubious financial practices like SPEs led to its downfall. The scandal prompted the Sarbanes-Oxley Act, aiming to prevent similar corporate fraud.
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Enron Corporation was formed through the merger of two natural gas companies and quickly became a major player in the energy market
Mark-to-Market Accounting
Enron's use of mark-to-market accounting allowed it to record potential future profits as current income, contributing to its financial instability
Special Purpose Entities (SPEs)
Enron's use of SPEs to hide debt and inflate profitability ultimately led to its downfall
Enron's hyper-competitive culture and aggressive performance review system fostered a toxic work environment and facilitated unethical behavior
Enron's systematic and planned accounting fraud, including the use of SPEs and mark-to-market accounting, led to its financial collapse
The Enron scandal resulted in significant losses for shareholders, job losses, and changes in financial regulations and corporate governance practices
The Enron scandal led to the introduction of the Sarbanes-Oxley Act and increased emphasis on ethical conduct in financial reporting and corporate governance
00
Enron once ranked as one of the top ______ and ______ suppliers in the U.S.
natural gas
electricity
01
______ was appointed as Enron's CEO to guide the company after the deregulation of the ______ market.
Jeffrey Skilling
natural gas
02
Enron scandal exposure year
2001
