The case study of Enron

The America’s one of the biggest scandal that had been held by Enron corporation, an energy trader company.  Enron was formed in july 1985 when the texas based Houston Natural  Gas was merged with Inter north Nebraska Natural Gas company.

In 1990 Enron is the one of the profitable company ever known. It is the suppliers for all most all of the country in the world. After  Enron launched the Enron Online system , an internet based system the daily business reached on worth $2.5 billion. The shares of the company went on increasing up to $84.87 in the end of 2000. Enron is the top ranked company in America for six years.

But the scandal is recognize that how it began the top company for six years . The reason are the partners ship with fastow , the Arthur Anderson  LLP, Not  showing financial statement .And this the biggest scandal in the history of the america. And with the collapse of the Enron 4500 employees lost their jobs.

.Arthur Anderson (1885-1947)

    Arthur Anderson , an Orphaned at the age of 16 used to work as mail boy and once hired by controller of Allis Chambers in Chicago. In 1913 he formed a firm in partnership with Clarence Delany as Anderson Delany and Co. And in 1918 he dropped partnership with Clarence. He  renamed his company Arthur Anderson &co. And in 1917 he was Graduate from the Kellogg school.

Arthur Anderson LLP

      Arthur Anderson LLP’s full form is Arthur Anderson Limited Liability Partnership, based in Chicago was the used to be one of the “Big Five” accounting firms. It provide auditing, tax and consulting  services. It was founded in 1913, This  firm voluntarily surrendered it’s CPA( Certificate of Public Accountants ) after being found guilty of criminal charges on the handlings of the Auditing of Enron corporation, an energy based in Texas which had filled for bankruptcy. This firm was convicted of obstruction of justice for shredding document. The responsible individual for the Enron scandal are Nancy Temple( Anderson  legal Dept.) and David Duncan( Lead Partner for the Enron account).

Sarbanes Oxley Act : The act of 2002

Pub.L.107-204, 116 stat 745. Enacted July 30  2002

      ( Public Company Accounting Reform and Investor Protection Act), and (Corporate  and Auditing Accountability  and Responsibility Act ) are commonly  known as Sarbanes-Oxley Act, Sarbox or SOX. It is named after U.S senetor Paul Sarbanes and U.S Representative Micheal G. Oxley.

This law contains 11 titles and it covers issues as auditor independence,coperate governance, internal control assessment and enhanced financial disclosure. The main reason for the invention of Sarbanes Oxley Act is the collapse of the biggest coperation of the America , Enron.