Enron company

Enron Company is one of the corporates that faced dramatic heights and fall affecting thousands of employees. The scandal of Enron impacted the Wall streets to its core being one the largest integrated natural gas along with electricity companies. The company was one of the independent producers along with developers of the electricity of the world. Enron had strong market presence along with public offerings affecting the regulations and holdings. Enron expanded its venture across in the year 1999 by launching online websites so that the trading is effective. The company soon became the one of the largest business sites in the world with about 90% income. Enron witnessed strong and faster growth and in the year 2000 the revenue of the company reached about $100billion US. The company peaked the stock exchange market and was in the Fortune 500 as the sixth largest company. However, the company has series of scandals in its name and it started appearing in the year 2001. I have witnessed the finances and noted that it faced a loss of about $618 million in the month of October in the year 2001. Enron filed for the bankruptcy protection in the month of December and it was one of the biggest cases of bankruptcy in the US. 

I believe Enron had a structure which was shaky thus affecting its profitability and finances. Enron which was leading the market collapsed and affected several employees and the economy. Enron was flourishing, and the regulatory environment was supporting its actions. In the 1990’s the stocks of Enron were creating revolutions as it was in full swing by hitting 5000 in Nasdaq. The investors were attracted towards the share of Enron and were accepting the spikes in the price as normal. The reasons for the scandal were lack of proper financial aspects. I believe that one of the primary reasons for the downfall of Enron was its move from traditional cost accounting to mark to market accounting methods. The change in the accounting was based upon the approval from the SEC in the year 1992. Mark to market was augmented to measure the accounting fair value that impacted the assets and liabilities of the company. This accounting tool is based upon the fair value thud it is difficult to pin down. Thus, this accounting tool was another reason that led to the downfall of Enron in terms of generating and estimating false profits and losses. 

I would  focus upon the creation of Enron Online in the year 1999 that was impacting electronic trading. For any seller and buyer Enron would act as counterparty in terms of every transactions that affected the reputation along with credit in the energy sectors. The company was expanding slowly but the partnerships and lack of proper execution impacted Enron. In the mid of the year 2000 the company was trading about $350 billion. However, the issue was when the Dot.com started to burst thus Enron tried to capture its position and spend dollars in million for the project. Eventually, the company failed to gain any return from the investment made. During the year 2000 recession was affecting the market Enron was unable to withstand the pressure and its own decisions. The company was facing severe losses but by manipulating the financial data and statistics using mark to market accounting the actual figures were hided. This accounting is effective for trading securities but not for actual business. This was the first step towards the downfall of the company. I realized that the reason for its downfall was that company would create assets and immediately claimed along with projected it as profits. The finances of Enron were being manipulated because less revenues were generated but the projection was as profitable thus hampering the true and fair business. This form of accounting system and activities affected the business. Thus, it can be stated that mark to market accounting was initiated to hide the losses faced to reflect upon profitability. 

Furthermore, not only did Enron manipulated data but also used Special purpose vehicles in order to hide the debts it had which was mounting considerably. The basic intention is to hide the real accounting factors thus positively influencing the operating results. Hedging was part of the stock for effective balance sheet with respect to reducing counterparty risk. 

The company realized that it is not able to run the business and pay its debtors or benefit its creditors in the year 2011. Enron paid about $21.7 billion to its creditors in the year 2004 to 2011. The company was penalized for its actions and thus criminal charges were faced. Enron was charges to conceal the documents from SEC thus impacting the later. The scandal was gaining importance leading to securities frauds along with insiders trading. When the company filed bankruptcy, several charges were faced upon the executives. This led to imprisonment of the clients damaging the reputation of the company. Several lawsuits were filed against Enron along with Anderson. 

The scandal gave rise to various regulations and legislations so that the accuracy of accounting is measured for the trading companies. One of the most vital regulations was Sarbanes- Oxley Act (2002) which was implemented for penalizing so that financial records can be maintained without misleading data. This act prohibited the firms from offering false audit reports that impacted the clients.Enron Company is one of the corporates that faced dramatic heights and fall affecting thousands of employees. The scandal of Enron impacted the Wall streets to its core being one the largest integrated natural gas along with electricity companies. The company was one of the independent producers along with developers of the electricity of the world. Enron had strong market presence along with public offerings affecting the regulations and holdings. Enron expanded its venture across in the year 1999 by launching online websites so that the trading is effective. The company soon became the one of the largest business sites in the world with about 90% income. Enron witnessed strong and faster growth and in the year 2000 the revenue of the company reached about $100billion US. The company peaked the stock exchange market and was in the Fortune 500 as the sixth largest company. However, the company has series of scandals in its name and it started appearing in the year 2001. I have witnessed the finances and noted that it faced a loss of about $618 million in the month of October in the year 2001. Enron filed for the bankruptcy protection in the month of December and it was one of the biggest cases of bankruptcy in the US. 

I believe Enron had a structure which was shaky thus affecting its profitability and finances. Enron which was leading the market collapsed and affected several employees and the economy. Enron was flourishing, and the regulatory environment was supporting its actions. In the 1990’s the stocks of Enron were creating revolutions as it was in full swing by hitting 5000 in Nasdaq. The investors were attracted towards the share of Enron and were accepting the spikes in the price as normal. The reasons for the scandal were lack of proper financial aspects. I believe that one of the primary reasons for the downfall of Enron was its move from traditional cost accounting to mark to market accounting methods. The change in the accounting was based upon the approval from the SEC in the year 1992. Mark to market was augmented to measure the accounting fair value that impacted the assets and liabilities of the company. This accounting tool is based upon the fair value thud it is difficult to pin down. Thus, this accounting tool was another reason that led to the downfall of Enron in terms of generating and estimating false profits and losses. 

I would focus upon the creation of Enron Online in the year 1999 that was impacting electronic trading. For any seller and buyer Enron would act as counterparty in terms of every transactions that affected the reputation along with credit in the energy sectors. The company was expanding slowly but the partnerships and lack of proper execution impacted Enron. In the mid of the year 2000 the company was trading about $350 billion. However, the issue was when the Dot.com started to burst thus Enron tried to capture its position and spend dollars in million for the project. Eventually, the company failed to gain any return from the investment made. During the year 2000 recession was affecting the market Enron was unable to withstand the pressure and its own decisions. The company was facing severe losses but by manipulating the financial data and statistics using mark to market accounting the actual figures were hided. This accounting is effective for trading securities but not for actual business. This was the first step towards the downfall of the company. I realized that the reason for its downfall was that company would create assets and immediately claimed along with projected it as profits. The finances of Enron were being manipulated because less revenues were generated but the projection was as profitable thus hampering the true and fair business. This form of accounting system and activities affected the business. Thus, it can be stated that mark to market accounting was initiated to hide the losses faced to reflect upon profitability. 

Furthermore, not only did Enron manipulated data but also used Special purpose vehicles in order to hide the debts it had which was mounting considerably. The basic intention is to hide the real accounting factors thus positively influencing the operating results. Hedging was part of the stock for effective balance sheet with respect to reducing counterparty risk. 

The company realized that it is not able to run the business and pay its debtors or benefit its creditors in the year 2011. Enron paid about $21.7 billion to its creditors in the year 2004 to 2011. The company was penalized for its actions and thus criminal charges were faced. Enron was charges to conceal the documents from SEC thus impacting the later. The scandal was gaining importance leading to securities frauds along with insiders trading. When the company filed bankruptcy, several charges were faced upon the executives. This led to imprisonment of the clients damaging the reputation of the company. Several lawsuits were filed against Enron along with Anderson. 

The scandal gave rise to various regulations and legislations so that the accuracy of accounting is measured for the trading companies. One of the most vital regulations was Sarbanes- Oxley Act (2002) which was implemented for penalizing so that financial records can be maintained without misleading data. This act prohibited the firms from offering false audit reports that impacted the clients.