Enron Corp. was formed in 1985 from a merger of Houston Natural Gas and Internorth and principally operated as a distributor of natural gas. However, with time, the firm decided to venture into other entities such the internet as well as high-tech communications investments. The most striking thing that stands out is that Enron reports growth of annual revenues from under $10 billion in the early 1990s to $ 139 billion in 2001 (Jickling, 2002). The report shows a consistent rise and many investors get the image of a growing company where they speculate high profits in the subsequent years.
Nevertheless, according to the video provided the report issued by the management of Enron was not accurate. The firm was making losses, especially in the communications business. Individuals posit that the company might have made some revenue in the energy business, but dispute that the money accrued was below the indications in Enron’s reports. The main problem with the firm is that it falsified its accounts and misled investors, including its employees. It pretended that the losses were not occurring to it and instead assigned the losses to some of its partners. This dishonesty in not stating the actual state of the company duped many people who felt convinced that it was the best firm to invest.
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The actions of Environ represent fraud and economic conspiracy. The first individuals that ought to have been accountable are the members of the executive because they were part of the scheme to conceal the reality to the unsuspecting investors. Secondly, the accountants who were in charge of carrying out audits on the firm were to be charged too with conspiring with their client to defraud the public. The law agents did a commendable task of imprisoning those involved. As a result of the Environ case, many firms have reformed their systems and resolved to be open in their operations.
To conclude, the video provided is exciting because it is precise and summarizes the events that led to the closure of one of the firms perceived to be successful in an excellent way. The narrator in the video gives a snippet of how the fraud was carried out as well as the other parties that were involved. The video should be shown again next year to remind students of how several firms give false financial projections.
References
Enron: What Exactly Happened? (2017). YouTube . Retrieved 25 November 2017, from https://www.youtube.com/watch?v=hwollZoVmUc
Jickling, M. (2002, July). The Enron collapse: An overview of financial issues. Congressional Research Service, Library of Congress.
