Enron s Impact On The Natural Gas Industry - 2699 Words

Introduction: Enron was founded in 1985 as a result of a merger between Houston Natural Gas and InnerNorth of Omaha. During this time period there was a series of deregulations in the utilities industry which was highly regulated at the time. Enron original business was selling natural gas. Jeff Skilling developed the idea of a â€Å"gas bank† which was the middlemen for consumers and suppliers. Enron decided that if they were to increase their growth they needed to enter other markets due to the increase competition in the natural gas industry. Enron enter in the electric, water, broadband, pulp and paper industries. This new ventures were supposed to create millions of dollars in revenue for Enron; however most of this new ventures were immense failures which cost Enron significant losses. Enron never disclosed these losses to investors or the SEC until October 2001. Through different accounting practices with the help of its auditors (Arthur Andersen) Enron declared revenue numbers in the billions of dollars. Fortune magazine named Enron the most innovative company for six years straight and was ranked as the seventh largest company in the Fortune 500. Investors were in love with Enron although they could not explain how Enron was profitable. A year before Enron declared bankruptcy Enron’s shares were trading in the NYSE for $85 dollars. Many of Enron’s employees were encouraged to purchase company stock and many of them did. Retirees made it part of their 401Show MoreRelatedEnron And The Natural Gas Industry1542 Words   |  7 PagesEnron Background: Enron, based in Houston, Texas, was founded by Kenneth Lay as an energy and pipeline company in 1985 from the merger of two natural gas pipeline companies, Houston Natural Gas and InterNorth. The impetus for Lay to start Enron was the deregulation of the natural gas market in the mid 1980’s, which relaxed the rules on natural gas prices and allowed for more flexible agreements between natural gas producers and pipeline managers. These changes essentially eliminated the practiceRead MoreQuestions On Duty And Ethics1283 Words   |  6 PagesTRIDENT UNIVERSITY Selwyn G. Roberts Module 4 (Enron/Duty Ethics) Ethics 501 Dr. Gary B. Shelton January 28, 2016 DUTY ETHICS Duty-based ethics is a challenging concept to grasp because of the culture we currently live in. Contemplating consequences, whether good or bad is the golden rule when trying to determine the actions one should take. Our legal system is filled with do’s and don’ts which can have a direct affect on a person life. When dealing with external pressures e.g. home, work or peerRead MoreAgency Theory : Relationship Between Agents And The Business Essay1550 Words   |  7 Pagesrisk. Enron, was the world’s largest energy company in 2001. Enron forerunner, Northern Gas Company was incorporated in Delaware on April 25, 1930. From this date through July 1985, Enron had hundreds of purchases and new sub-entity constructions when they acquired Houston Natural Gas Inc. (Kastantin, 2005). On April 10, 1986, the company changed its name to Enron Corporation. Enron was an interstate and intrastate natural gas pipeline company, then later in 1989 Enron started trading natural gas commoditiesRead MoreThe Revenue Recognition Principle Of Enron1091 Words   |  5 Pagesactually is. Looking at Enron, accounting for future costs under the entire contract as expenses was violating the revenue recognition principle since the recognized revenues had not been earned. Yes, the Sithe energies case shows that Enron did not follow the revenue recognition principle. Sithe was one of the first contracts in which Enron employed MTM accounting. The contract was intended to last for 20 years, with an estimated value of $3.4-$4 billion. Through the use of MTM, Enron booked profits beforeRead MoreRise Fall of Arthur Andersen, LLP1016 Words   |  5 Pagesï » ¿ March 4, 2014 Rise Fall of Arthur Andersen, LLP Abstract Enron was a natural gas company that was formed in 1985 by Kenneth Lay. By 1992, Enron was the largest selling company of natural gas in North America. In October 2001 a scandal involving Enron was emerging. This scandal led to the fall of the company. The Enron case and many others cases led to the collapse of other companies that did business with them which included one ofRead MoreEnron s Financial Fraud And Corporate Fraud1700 Words   |  7 Pagesand collapses was occurs in United States. Includes Enron, Global Crossing, Worldcom, Healthsouth, AIG and Lehman Brothers scandals. In the American capital market, the investors abandoned a number of large listed companies leads to the bankruptcy for those companies. The corporate frauds not only deceive investors, but also make oneself paid a heavy price. At the same time, it not only harm the capital market, but also caused a significant impact on American that resulted in regulation changes. TheseRead MoreEnron And The Collapse Of Enron1303 Words   |  6 PagesEnron, a company which originated in Huston, Texas, was one of the largest American energy trading corporations in the nation. Although it was one of the most well known companies, it was also one that crashed and burned the fastest, shocking many people when it did. Not only did it end fast, the company caused quite a scandal wh ich is still being discussed and reviewed in today’s world. Enron’s bankruptcy scandal was so widely known because of the many people who associated themselves with the companyRead MoreFormula For Success : Rise Early, Work Hard, Strike Oil ( J. Paul Getty ) Essay1654 Words   |  7 PagesFormula for success: rise early, work hard, strike oil (J. Paul Getty). Introduction Fracking is a complex political topic, nonetheless, is showing a positive impact to the United States economy and leaving a negative footprint behind on the environment. In addition, consumers are experiencing a significant amount of profit due to the overwhelming supplies of oil, thus, the revolution in new technology is triggering an improper fracking system. This concept centrals to airborne pollution and waterRead MoreEnrons Impact On Enron1417 Words   |  6 Pagesâ€Æ' Many questioned how Enron made its money as no one could verify their revenue that they continually raised each quarter. Even with these questions in the back of people s minds, they continued to believe Enron s executives. Enron was an U.S. energy-trading and utilities company that housed one of the biggest accounting frauds in history. Enron s executives employed accounting practices that falsely inflated the company s revenues, which, at the height of the scandal, made the firm becomeRead MoreThe Rise and Fall of Enron1170 Words   |  5 PagesThe Enron Corporation was founded in 1985 by Kenneth Lay and based in Houston, Texas. Enron was known as one of the world’s leading electricity, natural gas, communications and pulp and paper companies. By the late 1990s Enron was considered one of the country’s most groundbreaking companies constructing power plants, gas lines, buying and selling electricity and gas, and partaking in a unique trading business; creating whole new markets for oddball commodities. In 1995 annual revenues were around