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Enron : An Extended Case Study

Enron : An Extended Case Study. Jim Rothwell Assistant Professor of Accounting Hickingbotham School of Business Ouachita Baptist University. The Crooked E: Coincidence or Prophecy ?. JAMES NIELSEN/AFP. Questions ?. What happened within the company ?

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Enron : An Extended Case Study

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  1. Enron: An Extended Case Study Jim Rothwell Assistant Professor of Accounting Hickingbotham School of Business Ouachita Baptist University

  2. The Crooked E: Coincidence or Prophecy ? JAMES NIELSEN/AFP

  3. Questions ? • What happened within the company? • What was the corporate environment and culture of the company? • Who were the major players and their roles? • What “red flags” were there for analysts, auditors, and others to observe? • What accounting and auditing issues arose within the company? • How did the Enron scandal impact the accounting profession? • What did we learn from Enron?

  4. Activities • View the movie “The Smartest Guys in the Room.” • View the movie “The Crooked E: The Unshredded Truth about Enron.” • Read the book “The Smartest Guys in the Room.” • Read the book “Anatomy of Greed.” • Research the financial statements of Enron from 1995-2002 • Create a timeline of the major events related to Enron from 1995-2002 • Create a list of the major players and their roles in the Enron scandal and collapse. • Identify the “red flags” of fraud that were evident within the Enron organization, culture, structure, and environment.

  5. Enron Portfolio • Major events timeline • List of major players and roles • Financial statement analysis and summary • “Red Flags” paper • Impact on the accounting profession paper • Role of Arthur Andersen • “What Did We Learn?” paper (personal reflection) • Enron Quiz Questions

  6. Accounting and Auditing Issues and Concepts (Cont.) • Accounting • Mark-to market • SPEs (off-balance sheet financing) • Impact on the profession • Government intervention

  7. Accounting and Auditing Issues and Concepts (Cont.) • Auditing • Impact on the profession • Collapse of Arthur Andersen • Sarbanes- Oxley • PCAOB • Ethics • Accounting firm • Client • Legal Liability • Social Responsibility • Evidence and documentation

  8. Accounting and Auditing Issues and Concepts (Cont.) • Auditing • Social Responsibility • Evidence and documentation • Audit Planning • Understanding the client – corporate culture • Understanding the industry/market • Risk assessment • Fraud risk factors • Internal Control • Reporting Issues

  9. Current Status • Enron • Legal issues and court cases • Former executives • Employees • Arthur Andersen

  10. Resources • “The Smartest Guys in the Room” – DVD (video) • The Smartest Guys in the Room: The Amazing Rise and the Scandalous Fall of Enron– Book (McLean and Elkind) • “The Crooked E: The Unshredded Truth about Enron” – DVD (video) • Anatomy of Greed – Book (Cruver) • SAS 99: Consideration of Fraud in a Financial Statement Audit • Other articles, presentations, literature, etc.

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