AC 503 Unit 1 Case Study Heather Friday - 91706

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Heather Friday Unit 1 Case Study AC 503 Advanced Auditing Enron Q1: The Enron debacle created what one public official reported was a “crisis of confidence” on the part of the public in the accounting profession. List the parties who you believe are most responsible for that crisis. Briefly justify each of your choices. 1. Arthur Andersen- The person I believe held the most responsibility in the demise of Enron is Arthur Andersen. As Enron’s auditor, he failed to comply with the accounting code of ethics by allowing Fastow and Skilling to pressure him to ignore their high risk practices first of all. He knowingly destructed incriminating evidence related to Enron’s scandal and failed to fulfill his reporting obligations to Enron’s board of director’s. 2. Andrew Fastow- Andrew Fastow, Chief Financial Officer of Enron, created and master minded the use of special purpose entities to hide the large amount of debt that was owed by Enron. 3. Jeffrey Skilling- Jeffrey Skilling, former CEO of Enron, definitely played a major part in the destruction and demise of Enron. For starters, Skilling developed a staff of executives that were willing participants in the misstating of Enron’s financial reports and records. Skilling hid much of the company’s debts by misstating earnings and changing balance sheet accounts in the company’s favor to entice investors.
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Heather Friday

Unit 1 Case Study

AC 503 Advanced Auditing

Enron Q1: The Enron debacle created what one public official reported was a “crisis of confidence” on the part of the public in the accounting pro

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