Enrons Fraudulent Accounting and Financial Information Essay -- essay

Published fiscal information is issued to meet the needs and demands of their users.These range from Shareholders who will check on what direction the company is heading, whether it has achieved healthy profits, that its solvent, the rank of the company and possible signs of failure. Other users are the employees, who will want to check the statements to see whether their jobs are safe and see if possible, whether there could be wage and bounty increases. This report offers information on operating results and financial conditions of companies to stakeholders as well as to shareholders. Any fraudulent financial reporting of a company uniform Enron for example would have a widespread and severe impact on employees, business acquaintances, investors as well as stakeholders and shareholders if the company went bankrupt. But are financial statements as truthful as they seem? There are many different types of safety measures in place to protect the investors and the public as a whole. These include Generally Accepted Accounting Principles (GAAP), Generally Accepted Auditing Standards (GAAS) and Statements on Auditing Standards (SAS) and all professional ethics. The GAAP is a specific set of guide lines that companies constitute when measuring and reporting information on their financial statements. During audits of any company it must be conducted yearly by an external and independent auditor to go through it follows GAAP consistently and if they do not, they have to explain why not, and present justifications to show that what they are doing is both ethical and appropriate in their situation. In the caseful of Enron they manipulated this by bolstering balance sheets with inflated asset values and dispersing their liabilities to... ... sold off their shares within a six month period to gullible investors who probably melodic theme Enron was still a good company to invest in, especially after seeing the financial statements which were obviously fal sified to attract them, just not knowing what was feeler around the corner. If the general workforce ever found out there would have been general panic and the shares would have collapsed over night, leaving the executives with nothing but worthless paper. In the end it was greed of the highest order. In December 2001 Enron filed for bankruptcy with debts on its books of 13.1 billion dollars, 18.1 billion on their subsidiaries and an estimated 20 billion of the balance sheets. This totalled in excess of 51 billion dollars. These figures are a clear indication of the needs to tighten up the overseeing of all company auditors both internal and external.