Everyone knows at least a little about Enron's story and it is a devastation created in the life of an employee. This belongs to any discussion of an ethical accounting process and is a story of what happens when accounting standards and ethics are discarded due to personal greed.
Enron began in 1985 to sell natural gas to gas companies and companies. In 1996, as a result of the change in the energy market, not fixed by government regulations, energy prices are determined by competition among energy companies, Enron said it would be better to buy and sell natural gas Starting acting as a mediator rather than a traditional energy supplier trading energy contracts, the rapid growth of Enron created excitement among investors and drove the stock price. As Enron grew, it expanded to other industries such as Internet services, and its financial contracts became more complicated.
For this fee, keeping the growth for the beginning is a new project to investigate. But this debt was created by Per Enron, which Enron will allow it to keep off the debt of that book, as their income will look less impressive, one partnership, Chewco 's investment (named after Starwars' character Chewbacca), Enron seems Enron was far more successful than it actually was when this debt did not appear in the Enron report in the Government It looked like. Enron argued that he doubled its profit in 2000 in two years.
In 2001, Enron's vice president Shelon - Watkins sent anonymous letters to Enron 's CEO Kenneth - Rey and feel that Enron could fall into the wave of accounting scandal. "Also, in August CEO Kenneth said he He was sending an e-mail to his employees expecting the stock price of Enron to go up, while he sold his own stock in Enron.
On 22nd, the Securities and Exchange Commission (SEC) announced that Enron is under investigation. On the 8th, Enron stated that it exaggerates revenues over the past four years by $ 586 million, it will bear more than $ 600 million in debt by next year
With these announcements, Enron's stock price plummeted. This decline has caused certain agreements with investors that Enron needed to repay money soon. There is bankruptcy in chapter 11 declared as a creditor of repayment in cash instead of a password.
What is the Sarbanes-Oxley method?
According to the 2002 Sarbanes-Oxley Act, Enron, Tyco International, WorldCom (now MCI) these recent scandals in response to major companies and accounting scandals, including those, the public's confidence in accounting - reporting practice has declined . Sponsors Paul * Sarbanes (D - Md.) And representative Michael G. Oxley (R - Oh.), The action was approved by the House by the Senate 99-0 by vote of 423-3. This law is extensive and has established all new US standards and enhanced standards. Public company board, management, and public accounting firm. The first and most important part of the law is to oversee accounting firms in the roles of corporate auditors of public companies and to review the new quasi-public agencies charged with training, some of the major provisions of the Public Sarbanes-Oxley Act It is as follows:
- Certification of financial reporting by Chief Operating Officer and Chief Financial Officer
- Auditor Client and all other non-auditing services auditors' audit committee including the complete ban of certain types of work for prior certification work by the auditor
- Companies listed on the stock exchanges must have a completely independent audit committee to oversee the relationship between the company and its auditors
- Large fines for quite a long maximum prison sentences and deliberately erroneous state financial statements for executives, judges, in general when setting up actual sentences, the federal
- Allow OSHA to file complaints with OSHA within 90 days to acquire reinstatement, repayment and benefits, compensatory damages, removal orders, and reasonable attorney fees and expenses
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