Enron Scandal for Students
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This document discusses the Enron accounting scandal and the roles of key players. Kenneth Lay played a leading role in the corruption at Enron. Jeffrey Skilling, the CEO of Enron, was found guilty on multiple counts of fraud and false statements. Andy Fastow, the CFO, used off-balance sheet entities to hide Enron's massive losses and served prison time. Andersen, Enron's accounting firm, failed to fulfill its responsibilities regarding Enron's financial statements and related-party transactions. The scandal resulted from deregulation, improper accounting of future profits, document shredding, job and retirement fund losses, and Enron sustaining itself through accounting fraud.
Enron Scandal for Students
- 1. Instructor: Tom Matys DPR105: INFO MGMT SYSTEMS
- 2. Kenneth Lee "Ken" Lay was an American businessman. He played a leading role in the corruption scandal that led to the downfall of Enron Corporation.
- 3. Jeffrey Skilling: CEO Enron • guilty on one count of conspiracy • guilty on one count of insider trading • guilty on five counts of making false statements to auditors • guilty on twelve counts of securities fraud • not guilty on nine counts of insider trading
- 4. Andy Fastow: CFO Enron Andy Fastow was one of the key figures behind the complex web of off-balance-sheet special purpose entities (limited partnerships which Enron controlled) used to conceal their massive losses. Fastow served a six-year prison sentence for charges related to these acts.
- 5. Enron’s Accounting Firm: The Powers Committee (appointed by Enron's board to look into the firm's accounting in October 2001) came to the following assessment: "The evidence available to us suggests that Andersen did not fulfill its professional responsibilities in connection with its audits of Enron's financial statements, or its obligation to bring to the attention of Enron's Board (or the Audit and Compliance Committee) concerns about Enron's internal contracts over the related-party transactions”. - Wikipedia
- 6. Deregulation of power and energy Mark to Marketing Buy/Sell power/energy stock
- 7. Claimed future profits as current profits Shredded evidence Congress passes SOX Initially hid profits by moving cash into personal accounts Cost 20,000 job losses 20 million in retirement funds were lost.
- 8. $100 billion in revenue from energy giant Enron was found to have sustained itself by means of institutional and systematic accounting fraud