Enron Case

Which parts of the merged g everyplacenance ad miniskirtstration, inwrought and external, do you believe failed Enron the most? In the evaluation of the Enrons grounds by trying to see the very big picture, it is non just well-nigh that the indispensable part of the bodied g everyplacenance establishment was failed or but also the external part of the corporate governance system was also failed. As noted on the last paragraph of the mini case, mevery race from different positions and different companies didnt execution responsibly and according to the gener totallyy accepted corporate governance rules.Internally because of the head executives utilize the companies resources and the power that their positions provides them for their own interests without appreciateing on behalf of the stakeholders and sh areholders, collapse of Enrons corporate governance system affected not only Enrons telephoner but also all the other institutions which integrated to the Enrons system. Externally, peculiarly legal counsel and examineor company didnt act ethically. To ward off losing the best and the most powerful customer, they swept all inappropriate practices beneath the carpet.Therefore we can think that, internal and external part of corporate pay act harmoniously in that case. In the event of the absence of any single actor would result in different consequences or to eruption of the event more than earlier than it did. 2. Describe how you think each of the case-by-case stakeholders and components of the corporate governance system should fix either prevented the problems at Enron or acted to resolve the problems in advance they reached crisis proportions? If we appreciate the Enron Case without going on deeply, we forget surprise how such(prenominal) a giant corporation can secernate down in a very short time process.However, when we evaluate the case deeply, it is understood that the fall of Enron is the last part of a fibril reaction which h as been already started long time ago. Therefore, before reaching the crisis point, stakeholders or components of the corporate governance should have taken rough measures. The radical changes by Enrons managements can be evaluated as the first alarm of the hazardous end. For such big companies Board of Directors should have been hold inling for equivalent immaterial authorities for the sake of stakeholders. This control mechanism is not just unavoidable for financial of accountancy issues.After the fall of Enron, the government brought the General Accepted chronicle Principles, Statements on Auditing Standard and Auditing Procedures. However, if these kind of preventive laws have been implemented before the fall of Enron and A. Anderson, result could be very different. In fact, auditor companies are the part of commercial mechanisms. Therefore it is very normal to expect them to act in favor of companies that they consult, if there are no control mechanisms over them as in t he case of Enron. For this reason, US increase the pressure over these kinds of companies.Management is responsible of corporate governance applications to decrease fraud and irregularity and control the procedures. While the duty of internal auditor is to control the entitys internal applications, the responsibilities and duties of external auditor are to mould efficient audit planning, to audit based on audit planning work done and to make appropriate documentation which forms evidence in the documentation process. Another heavy point for the Enron case is that why the government allowed the Enron act as a monopoly in the US energy sector. After fall of Enron, the electricity couldnt be delivered to the more or less parts of US.Obviously, supply control system has been disfunctional in this market as a result of inefficient political management. 3. If all publicly-traded firms in the United States are operating within the same raw material corporate governance system as Enron, why would some people believe this was an isolated happening, and not an example of many failures to come? We cannot sound out The Enron collapse is just an example of misleading financial reporting. It whitethorn be said that it is the wrong combination of leadership, business evolution, market behaviors, and the times all combined to create a monster.As it is known, Corporate Governance is the system used to direct and control a corporation. And it defines the rights and responsibilities of key corporate participants such as shareholders, the board of theater directors, officers and managers, and other stakeholders. The Enron Case is a breakdown of corporate governance in the most baroque of recent scandals where there were not only conflicts with standards for good corporate governance but also unusually extensive use of sophisticated techniques and transactions to manipulate the firms financial reports.During the same years with Enron Case, Parmalot and Worldcom cases als o occurred, mainly because of the same reasons, and resulted in a same way. Therefore wrong combinations for the corporative governance may result in a same way. Corporative Governance has been argued too much after the Enron Case. However some people believe that Enron was an isolated incident and not an example of many failures to come according to above writings. The biggest reckon behind this thinking can be related to that Enron is much large than other failed companies and was acted like a monopoly.That is to say, all of the case showed us that how some companies can bankrupt because of the wrong combination of leadership, business evolution, and market behaviors. We think the following citation would be helpful so as to obliterate the Enron Case a little more. On March 5, 2002, Kirk Hanson, executive director of the Markkula Center for Applied Ethics gave a speech on a newspaper Enron is a prominent example of a new preservation company. Kenneth Lay and Jeffrey Skilling c laimed that Enron was the most innovative company in the United States and at times tried to intimidate reporters or analysts who questioned their strategy.In the new economy, new kinds of companies have been created. Enrons collapse will encourage investors, analysts, reporters, and employees to ask old economy questions about these new economy companies How does this company make money? Can it draw out this strategy over the long term? How do those who work in and with this company feel about it? The new economy has lost some of its appeal after the collapse of many dot. com companies and of Enron.