Everyone knows at least a little about the history of Enron and the devastation it created in life and are employed. It is a story that belongs to any discussion on the ethical accounting process and what happens when accounting and ethical standards is ignored for personal greed.
Enron was started in 1985 gas sales to companies and businesses. In 1996, the energy markets have been modified so that the price of energy could be decided by the competition between enterprises of energy instead of being fixed by government regulation. With this change, Enron began to function more as an intermediary in a traditional energy provider contracting energy instead of purchasing and sale of natural gas.Enron created rapidly growing enthusiasm among investors and has led the award until .Enron grows, has expanded into other sectors such as Internet information services and its financial contracts have become more complicated.
To maintain this growth rate, Enron has begun to borrow money to invest in new projects. However, because the debt would make their earnings look less impressive, Enron has begun to develop partnerships that would keep the debt off the coast of his books.A partnership created by Enron, Chewco (named after the character of Chewbacca Star Wars) Investments allowed Enron keep 600 million dollars in debt off the coast of the books he showed to the Government and persons who possess Enron .lorsque actions this debt shows no reports of Enron, it Enron seem to be far more successful that actually. In December 2000, Enron claimed tripled profits in two years.
In August 2001, Enron, vice President Sherron Watkins sent an anonymous letter to the CEO of Enron, Kenneth Lay, describing the accounting methods that she felt could lead to Enron to "explode in a wave of accounting scandals.Also in August, CEO Kenneth Lay sent e-mails to employees by saying that he expected to Enron stock prices to rise; Meanwhile he sold off the coast of its own shares in Enron.
On October 22, the Securities and Exchange Commission (SEC) has announced that Enron was investigation .the 8 November, Enron said overstated earnings for the past four years by 586 million dollars and that he owed more than 6 billion dollars in debt by next year.
With these announcements, Enron stock took a downward plongée.Cette triggered some agreements with investors who made it necessary for Enron to repay money immédiatement.Lorsque Enron could not find the money to repay his creditors, he stated the chapter 11 bankruptcy.
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