Jul
28
2010
Everyone knows at least a small about the Enron story as well as the devastation (πωλουνται διαμερισματα) it created during the lives of is employees. It is a story that belongs in any discussion of ethical accounting (αγγελιες κατοικιων) processes and what happens when accounting (αγγελιες κατοικιων) standards and ethics are discarded for own greed.
Enron started out in 1985 selling natural (αγγελιες κατοικιων) gas to gas organizations and businesses. In 1996, energy (πωλουνται διαμερισματα) markets had been changed so how the cost of energy (πωλουνται διαμερισματα) could now be decided by competition between energy (πωλουνται διαμερισματα) firms instead of being fixed by government regulations. With this change, Enron started to function much more like a middleman than a conventional energy supplier, trading (αγγελιες κατοικιων) in energy contracts instead of buying and selling natural gas. Enron’s rapid growth made excitement between investors (πωλουνται διαμερισματα) and drove the stock cost up. As Enron grew, it expanded into other industries for example Internet services, and its financial (αγγελιες κατοικιων) contracts became a lot more complicated.
In order to retain growing at this rate, Enron began to borrow (πωλουνται διαμερισματα) funds to buy new projects. However, due to the fact (πωλουνται διαμερισματα) this debt would make their revenue look a smaller amount impressive, Enron began to generate partnerships that would enable it to keep debt off of its books. A single partnership made (αγγελιες κατοικιων) by Enron, Chewco Investments (named after the Star Wars character Chewbacca) allowed Enron to retain $600 million in debt off with the books it showed towards the federal government and to people who own Enron stock. When this (αγγελιες κατοικιων) debt did not show up in Enron’s reports, it made Enron glimpse far more successful than it really was. In December 2000, (πωλουνται διαμερισματα) Enron claimed to acquire tripled its profits in two years.
In August 2001, (αγγελιες κατοικιων) Enron vice president Sherron Watkins sent an anonymous letter to the CEO of Enron, Kenneth Lay, describing accounting methods that she felt could lead Enron to “implode inside a wave of accounting scandals. ” Also in August, (πωλουνται διαμερισματα) CEO Kenneth Lay sent e-mails to his employees saying that he expected Enron stock costs to go up. Meanwhile, he sold (αγγελιες κατοικιων) off his own stock in Enron.
On October 22nd, (πωλουνται διαμερισματα) the Securities and Exchange Commission (SEC) announced that Enron was under investigation. On November 8th, (αγγελιες κατοικιων) Enron said that it has overstated income to your past four years by $586 million and that it owed more than $6 billion in debt by following year.
With these (πωλουνται διαμερισματα) announcements, Enron’s stock cost took a dive. This drop triggered certain agreements with investors that made it necessary for Enron to repay their money immediately. As soon as Enron could not come up with the funds to repay its creditors, it declared for Chapter 11 bankruptcy.
Tags: accounting
