Enron

Enron started small as more businesses but grew in a catamenia of 15 years to become one of the largest companies in the country. Competition also grew and Enron was non as profitable as forward and expenses started pickings over. New people were hired to do the connectedness break again, but the plan that was proposed required for the confederacy to dose a lot of silver. Money that the company was not in position to spend. The company did not have this silver available. The company then teamed up with banks to facilitate the neat necessary to nurse the plan work. There was in informal carry on the money borrow and the breeding was not organism enter in the fiscal statements. The idea proposed to help the company grow was a good idea, the problem was the need for capital and that this information was not being recorded, no track on the money invested. This is an opportunity for fraud. The company was inviting anyone in the accounting surgical scraping or involved in these transactions to open fraud. LJM1 pecuniary statements were separated from Enrons financial statements was there were not consolidated. This was a major mistake. The same person that was already rendting fraud was in charge of LJM1. This singular was in charge of these companies without any home(a) control in place.

The fraud was easy and undetectable since this individual(a) was in charge of everything. This type of fraud is very accustomed and the reason many big companies have died. There is no congenital control. Too much money being intercession by few people and no one is fetching ca re of business. The company should have sepa! ration of duties and set internal rules to ensure that no fraud was committed. The company provided the fraudulent to commit fraud very easy and for a long tip of time. Of course lack of clarity in financial statements is a red flag for investors to look further, ask questions and not to invest until the information is clear and convincing. For many investors it might...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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