Are Published Financial Statements Really Reliable?
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Code : GOV0028B
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Region : USA |
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The Enron fiasco Enron was formed in 1985 when Houston Natural Gas merged with Internorth, a merger engineered by the then Houston natural Gas CEO Kenneth Lay. Lay took over as CEO of the merged entity named Enron Corporation which was headquartered in Houston. Enron’s original operations involved transmission and distribution of electricity and gas throughout the United States and the development, construction and operation of power plants, pipelines and other infrastructure projects worldwide. In 1998 Enron moved into the water sector, creating Azurix Corporation. But Azurix failed to break into the water utility market and ended up as a loss maker. In April 2001 Enron winded up Azurix and sold its assets... Earnings above ethics Enron’s reputation was fast eroding due to rumors of bribery and applying political pressure to secure contracts in Central America, South America, Africa and the Philippines. One of the most controversial issues was the $3 billion contract with the Maharashtra State Electricity Board in India where it was alleged that the officials of the company used political connections within the Clinton and Bush administrations to exert pressure on the board... Admissions of Guilt Wesley H. Colwel, testified that in 2000, the company dipped into reserve accounts set up for problem contracts to illegally pad earnings. Wanda Curry, said she had led a project that uncovered problems with Enron Energy Services, covered up in part, by transferring more than $500 million in losses to the wholesale energy unit from its retail unit... |
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The World Com debacle In the year 1983 Long Distance Discount Services, Inc (LDDS) a telecommunication services company was founded in Jackson, Mississippi, in United States with Bernard Ebbers as its CEO. In 1995 it was renamed as LDDS WorldCom and later just WorldCom. The company’s Growth was attributable to the acquisitions it made through the 1990s especially its acquisition of MCI communications in 1998...
