1. THE BEGINNINGS OF ENRONEnron has its beginnings in the
natural gas.Enron was a part of the Northern Natural Gas Company
inOmaha, Nebraska.Enron was formed in 1985 after the merger of
HoustonNatural Gas and Omahas InterNorth companies. It was
aninterstate pipeline company.
2. ENRONS CHANGESEnron lost a lot of profit during the merger
and need a way tomake money.Enron began expanding the company into
the trading of naturalgas.Enron Online was launched for the purpose
of trading naturalgas online.Enron also launched a broadband. 3.
ENRON CHANGES CONTINUEDEnron also invested in a numerous
investmentsthat proved to be non profitable.Enron began using
Special Purpose Enterprise(SPEs) to cover up investments and deals
gonebad.SPEs are allowed to be omitted from financialreports as
long as a private party owns them.Enron leaders used accounting
fraud and tricks todeceive shareholders and employees. 4. ENRON
CHANGES CONTINUEDIn 2001 Enrons deception began appearing.Enrons
stock value dropped to almost worthless.Enron filed for bankruptcy
December 2001 andabout 5,000 Enron employees lost their jobs. 5.
ENRONS CULTUREEnrons culture was one of dishonesty, lack
ofcommunication, and fraud.CEO Kenneth Lay started the organization
off on a lie whenpromising not to move the headquarters after the
merger.(He moved the headquarters from Omaha to Houston)Enrons Code
of Ethics and culture reflect two differentattitudes. 6. ENRONS
CULTURE CONTINUEDThe Code of Ethic reflects honesty, integrity,
andcommitment.Enron lied to employees telling them to continueto
invest in the company and ensuring themEnron was in perfect
financial health. 7. ENRONS REASONS FOR DECEITGreedKenneth Lay,
AndrewFastow, Jeffery Skilling, and accountantArthur Andersen
created SPEs andcommitted accounting fraud to keepmaking money off
of Enron.Lay wanted to keep the image as the leaderof the New
Economy. Failure was notan option for him. So this drove him
todishonesty. 8. ENRONS AFTERMATHLay, Skillings, and Andersen all
faced trials for their crimes.New laws were created to prevent
another Enron from happening and to protect shareholders and
employees of corporations- Sarbanes-Oxley Act was created 9.
SARBANES-OXLEY ACTPurpose:To restore faith and confidence in
thefinancial marketTo add requirements and standardsduring the
auditing processProtection for employees andshareholders 10. Enron
was well on its way to becoming a greatinnovative company. It had
the drive and theinnovative spirit to create ideas and change
withthe times. The problem Enron had was not beingable to learn
from their mistakes and take the timeto think of ways to fix or
improve the company.Enron was in a hurry to do everything andbecome
the leader of the new economy. It letspeed and not taking the time
to fix mistakes killthe company. 11. REFERENCESEllis, John. (2002).
Life After Enrons Death. Fast Company, Issue 56.Business Source
Complete Database.Jickling, Mark, (2003). Accounting Reform After
Enron: Issues in the 108thCongressCRS Report for Congress.Chandra,
G. (2012, September 23). The Enron Implosion and Its Lessons.
Retrieved From http://web.ebscohost.comAblander, M. (2012,
September 23). How Could it Happen? Enron and the Architecture of
Wrong doing.Retrieved From http://web.ebscohost.com
