Essay On The Collapse Of Enron

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That which happened with the demise of Enron was an eye opener for everybody. One would like to think that the financial institutions, broker firms, organizations and the government have their best interest at heart, but that is not always the case. This incident caused the people to lose faith in the institutions that they previously had so much trust in. If the people do not have trust, then the businesses cannot strive and the economy will continue on a down-ward slope. The problems that existed with Enron was that their culture was not conducive to succeed, because it was not built on trust. There was a breakdown in operation at the upper management level. The leadership was one of charisma and self-serving. There existed a conflict of interest due to one person working as an executive member for the company and was also a member of their accounting team. This down-fall was the work of a group of people, in upper management, making a collaborative decision for
When you think of accounting and Enron the name Arthur Andersen comes to mind. Andersen was a member of one of the major accounting firms but he was also a member of the Enron executive team. His accounting firm did the auditing for Enron; also, so he held a dual position within the company. It seems logical that when the problems started to exist that the accounting firm should have tried to work with management to remedy the problems. One reason for not working with management may be due to the conflict of interest. Andersen was part of the management team serving as a consultant, helping make decisions and creating the problems, and on the other end, he was the one auditing the company. Why would he knock down something he helped create, especially since he was reaping the benefits from what the company had going on? On the other hand, as the auditor, if he covered it up, he still got

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