The movie is a story about the rise and fall of one of the most scandalous corporations in the history of the United States. The movie shows various incidences in which executives of the once seventh-largest company in America engage in poor accounting of funds and running of the corporation, which leads to the corporations fall. The corporation’s executives misappropriate billions of dollars, which results in ruining of employees’ life-savings as well as the scrambling of investors. The documentary begins by describing the birth of Enron and how it becomes North America’s largest natural gas seller. However, it is characterized by underhanded as well as unethical business practices such as when it profited from the California energy crisis at the public’s expense, thus leading to its fall.
Some of the relevant accounting concepts and issues in the movie include mark-to-market accounting as well as the idea that there was the utilization of Special Purpose Entities (SPE’s), which was done in a bid to hide the corporation’s financial debt. Mark-to-market accounting commonly abbreviated MTM or M2M. Also, fair value accounting refers to a practice in accounting where a business entity conducts an update on its assets based on their current market value. As a result, there are instances where certain assets are valued at price higher than they are which makes the company appear as if it is doing well financially when it might not be.
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I learnt that as an accountant it is important not to be lured by executives into engaging in unethical and illegal accounting practices. This is because not only will it ruin my chances of continued accounting practice, but it will also negatively influence me as an employee of the company that will be negatively affected by accounting malpractice. Therefore, to preserve my career in account, I will be safer engaging in ethical and responsible accounting practices.
