Enron Case Answer Essay Example

strategy to manipulating revenue which hurt the stakeholders a lot.

Considering all aspects of the case, what factor of factors do you believe most contributed to the collapse of Enron? In your answer, please consider both external and internal factors. Outline The factors that contributed to the collapse of Enron Internal factors External factors

In my opinion, Enron’s strategy was an important factor that contributed to the company’s collapse. It was basically where the company’s problems began. The internal factors are the company’s corporate culture, compensation and rewards systems that fostered an unquestionable environment. External factors are corporate governance, fraudulent accounting to manipulate the revenues, and the ability for Enron to influence politics and deregulation.

What steps should be taken now by corporate managers, stakeholders, and policy makers to prevent a similar event from occurring in the future? Outline Steps by corporate managers Steps by stakeholders Steps by policy makers

From now on, the corporate managers should take the steps of considering more ethical ways of achieving its objectives, realizing they are personally responsible for the validity of the financial statements, lowering compensation to board members and creating professional relationships among the company’s board, upper management and external corporate governance agents. Stakeholders should take the steps of increasing their oversight of the company’s operations and establishing an ethic committee. Policy makers should take the steps of establishing a specific agency to regulate these contributions made by business corporations and making laws that external auditors must report any illegal or unethical accounting practices included in a company’s financial statements to the SEC.