Enron scandal summary wikipedia
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Enron Scandal and Accounting Fraud: What Happened?
Before its demise, Enron was a large energy, commodities, and services company based in Houston, Texas. Its collapse affected over 20, employees and shook Wall Street. At Enron’s peak, its shares were worth $ When it declared bankruptcy on Dec. 2, , shares traded at $
Key Takeaways
- Enron’s accounting method was revised from a traditional historical cost accounting method to a mark-to-market (MTM) accounting method in
- Enron used special-purpose vehicles to hide its debt and toxic assets from investors and creditors.
- The price of Enron’s shares went from $ at its peak to $ at bankruptcy.
- The company paid its creditors over $ billion from to
Enron's History and Accounting Method
Enron was formed in following a merger between Houston Natural Gas and Omaha, Neb.-based InterNorth. Houston Natural Gas' chief executive officer (CEO) Kenneth Lay became Enron’s CEO and chair. Deregulation of the energy markets all
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Enron
American energy company
This article is about the corporation. For the documentary, see Enron: The Smartest Guys in the Room. For the play, see Enron (play). For the accounting scandal, see Enron scandal.
Logo (designed by Paul Rand) used from to This was Rand's final major logo before his death in November | |
| Company type | Public |
|---|---|
Traded as | |
| Industry | Energy |
| Predecessor | |
| Founded | July&#;16, ; 39 years ago&#;() in Omaha, Nebraska, U.S. |
| Founder | Kenneth Lay (for the Houston National Gas branch) |
| Defunct | March&#;1, ; 17 years ago&#;() November&#;28, ; 8 years ago&#;() (as Enron Creditors Recovery Corporation) |
| Fate | Chapter 11 bankruptcy (as an effect of accounting fraud) |
| Successor | |
| Headquarters | Smith Street United States |
Area served | United States, India, Caribbean, Brazil, Canada, and Mexico |
Key people | |
| Services | Energy |
| Revenue | $ billion |
Net income | $ million |
| Total assets | • Enron scandalaccounting scandal The Enron scandal was an accounting scandal sparked by American energy company Enron Corporation filing for bankruptcy after news of widespread internal fraud became public in October , which led to the dissolution of its accounting firm, Arthur Andersen, previously one of the fem largest in the world. The largest bankruptcy reorganization in U.S. history at that time; Enron was cited as the biggest audit failure.:&#;61&#; Enron was formed in bygd Kenneth Lay after merging Houston Natural Gas and InterNorth. Several years later, when Jeffrey Skilling was hired, Lay developed a staff of executives that – bygd the use of accounting loopholes, the misuse of mark-to-market accounting, special purpose entities, and poor financial reporting – were able to hide billions of dollars in debt from failed deals and projects. Chief Financial Officer Andrew Fastow and other executives misled Enron's board of directors and audit committee on high-risk |