The Enron case by Sofia Rentería

What could have been...

sofirentjim — 2024-01-10 15:53:12 UTC

If only Andrew Fastow hadn't tried to avoid a little issue, like paying debt, he wouldn't find himself in such a big problem, Arthur Andersen company could have helped, but they chose the easy way out.
It's possible that , Andrew Fastow wishes his time in prison wouldn't be so bad because he committed a white-collar crime.
Enron company wishes they had stayed in their successful position, and their high share value.
It might have been possible that people from higher ranges in the company were involved because they could get a lot of money from avoiding debts.
If only we didn't live in a society that is so corrupted and selfish, that makes people like Fastow think that they could get away with everything bad they do.

The crime

2024-01-10 16:07:59 UTC

In the early 2000s, the Enron scandal was a big corporate crime that seriously affected American business and how accounting was done. It wasn't just one bad thing that happened, but a complicated situation of lies and corruption.

Enron hid debts and boosted profits through complicated partnerships, fooling investors and inflating stock prices. The executives manipulated the stock prices by selling shares for a profit while hiding the true financial situation. Arthur Andersen, Enron's auditor, ignored signs of fraud and neglected their accounting duties.

Enron's problems came to light when employees and journalists exposed accounting issues. In 2001, Enron went bankrupt, causing big losses for investors and employees. Some executives, like Lay and Skilling, were found guilty of wrongdoing.

The players

2024-01-10 16:39:23 UTC

Enron Corporation:

A famous United States energy company, engaged in commercial activities of energy, services and products, characterized by its innovative business strategies and its rise in the markets.

Enron stock, once worth as much as $90.75 per share, fell to $0.26 just prior to the bankruptcy filing.

Arthur Andersen:

Was one of the world's prestigious accounting firms in auditing and consulting services.

However, their prestige was affected due to their involvement in the Enron scandal, since they were an auditor of the Enron company, responsible for guaranteeing the accuracy of the financial statements. He was accused of professional negligence and covering up Enron's fraudulent accounting practices.

Andrew Fastow:

Andrew Fastow was the chief accounting officer of the Enron Corporation. Since he was in charge of that position, the company carried out fraudulent accounting practices that led to its collapse. He designed financial plans and schemes and the entities they used to hide debts and losses, resulting in inflating their income and presenting a more solid financial image of reality.

In 2001, he was charged with conspiracy to commit fraud, money laundering and obstruction of justice.

Discuss and Reflect

2024-01-10 16:45:31 UTC

I wish there was more transparency from the companies by implementing stricter rules for financial reports so all investors know exactly what is going on with their money. If investors knew what was happening they would have stopped investing much earlier.

Also, there should be a law that protects workers who report the fraudulent things that companies do without being afraid.

Finally, I wish that there was regularly reviews to keep pace with business practices and all the financial instruments so the law evolves.

The Conditionals

0233944_1 — 2024-01-10 16:56:01 UTC

1. If Fastow hadn´t committed the crime, he would be free.

2. If internal auditors of the company had done their job, they could have saved the company.

3. If Enron company didn´t make up their finances, the investors wouldn't have lost their money

4. If the companies learn from the Enron case, that won't happen again in the future.

5. If the CEO of Enron company was smart and expert, he would have looked for other solutions to the company's problems.