Enron_ An Extended Case Study

Enron: An Extended Case Study
Jim RothwellAssistant Professor of AccountingHickingbotham School of Business Ouachita Baptist University
The Crooked E: Coincidence or Prophecy ?
JAMES NIELSEN/AFP
Questions ?
What happened within the company?What was the corporate environment and culture of the company?Who were the major players and their roles?What “red flags” were there for analysts, auditors, and others to observe?What accounting and auditing issues arose within the company?How did the Enron scandal impact the accounting profession?What did we learn from Enron?
Activities
View the movie “The Smartest Guys in the Room.”View the movie “The Crooked E: TheUnshreddedTruth about Enron.”Read the book“The Smartest Guys in the Room.”Read the book “Anatomy of Greed.”Researchthe financial statements of Enron from 1995-2002Create a timeline of the major events related to Enron from 1995-2002Create a list of the major players and their roles in the Enron scandal and collapse.Identify the “red flags” of fraud that were evident within the Enron organization, culture, structure, and environment.
Enron Portfolio
Major events timelineList of major players and rolesFinancial statement analysis and summary“Red Flags” paperImpact on the accounting professionpaperRole of Arthur Andersen“What Did We Learn?” paper (personal reflection)Enron Quiz Questions
Accounting and Auditing Issues and Concepts(Cont.)
AccountingMark-to marketSPEs (off-balance sheet financing)Impact on the professionGovernment intervention
Accounting and Auditing Issues and Concepts(Cont.)
AuditingImpact on the professionCollapse of Arthur AndersenSarbanes- OxleyPCAOBEthicsAccounting firmClientLegal LiabilitySocial ResponsibilityEvidence and documentation
Accounting and Auditing Issues and Concepts(Cont.)
AuditingSocial ResponsibilityEvidence and documentationAudit PlanningUnderstanding theclient – corporate cultureUnderstanding the industry/marketRisk assessmentFraud risk factorsInternal ControlReporting Issues
Current Status
EnronLegal issues and court casesFormer executivesEmployeesArthur Andersen
Resources
“The Smartest Guys in the Room” – DVD(video)The Smartest Guys in the Room: The Amazing Riseandthe ScandalousFall of Enron– Book (McLean andElkind)“The Crooked E: TheUnshreddedTruth about Enron” – DVD(video)Anatomy of Greed–Book (Cruver)SAS 99: Consideration of Fraud in a Financial StatementAuditOther articles, presentations, literature, etc.