Enron, the smartest guys in the room Essay

Enron was wholeness of the unsoundgest scandal of all time in the stock commercialise. The three master(prenominal) guys leading the pack was Ken adjust, Jeffrey Skilling, and Andy Fastow. The come with was not making turn a profit so they decided to do future appraise accounting. This was shown to sh beholders so they can spend money and invest in Enron. The future value accounting just shows a list of future profit that was predicted. What very happened? Why it can happen again? What can be through with(p) to prevent it? and What is now being dont to prevent it? These are the question that will be answered and explained.What actually happened? Andy Fastow was the one who created several smaller companies that would all overlay the losses Enron had do. Enron showed that they were making great increases in the stock market and others wanted a piece of that. They even convinced their own employees to defile stocks. Enron wanted to hide their scandal so bad that they pai d enthronisation company to fire the employee that had any concerns. Enron was behind the California Energy Crisis and made billions off the state. They had the power plants shut down and resold energy for much high and made outrageous profit.Their company got so big within a short amount of time, but so did their losses. It was getting much harder for them to hide the scandal as their company progresses. A writer at Forbes magazine was the one who started the collapse of Enron. She released an article and what Enron was truly doing and it went downhill from there. Jeffrey Skilling bailed on the company and sold all his stocks and left Ken Lay and Andy Fastow to run the company. Enron in the end collapsed and all the employee lost everything. Jeffrey Skilling and Andy Fastow were sent to prison for the scandal and Ken Lay passed away after the trials.The main thing that can be through to prevent another Enron scandal is the involvement of the investors themselves. The stockholde rs need to know nigh everything and anything that goes on in the company they are investing to the best of their abilities. focus and the Board members similarly play a very big manipulation in avoiding another Enron. They are the one to keep track of the capital coming in and out of the company. Calpers are the current members that watch over the investors money and make sure everything is where theyre suppose to be.Regulators are also important in having strict regulations for companies, but lenient enough so there is room for competition. The Enron Scandal can happen again if a company is using the future value of accounting, but with the impudent drive out and order that is set up, it is very unlikely it will happen. These newfound check and order are very strict and precise on company so that they can prevent another major scandal. analyze committees have the right to access the companys financial statements and have the company cooperate with them at all times.The dr ive why Enron got away with their scandal for so long was because they had their own examine committee checking up on them. There is no way to only prevent another scandal, but a scandal as big as Enron will surely not happen again. In the end, check and balance comes in to play to keep any company from pulling a scandal as big as Enron. Because there was a loose leash over the company, Enron took advantage of that to the max and scammed every investor for their money. now the lesson has been learned and companies are being regulated and watched for the best of the investors.