Background
Who was appointed CEO when Enron was founded?
Kenneth Lay
Jeff Skilling used this complex approach for financial reporting, which made it difficult for investors to to interpret Enron’s financial statements.
Black box
How many sections does the SOX act have?
11
Name two of the four factors that led to failure in the company’s corporate governance?
Board or Directors
Leadership Failures
Internal Controls
Role of Regulators
What unethical practice was done by Arthur Andersen when they ignored red flags in Enron's financial statements?
Biased Accounting
What sector was Enron primarily focused on in its early stages?
Energy Sector
What is a legal entity created to fulfill a specific or temporary objective?
Special purpose entities
What services did Arthur Andersen LLP provide?
Auditing
Tax advising
Consulting services
What regulatory commission failed to identify and take action after numerous red flags in the financial statements?
SEC
Enron's "Rank and Yank" system led to what type of negative workplace environment focused primarily on short-term performance?
Cutthroat and toxic competition
In which year did Jeffrey Skilling join Enron?
In which year did Jeffrey Skilling join Enron?
What accounting practice excludes certain assets and liabilities from the balance sheet?
Off-balance sheet
Why was Arthur Andersen LLP convicted?
For shredding financial documents in relation to its audit of Enron
What did leadership prioritize over long-term sustainability of the company?
Short-term profits and personal wealth
What was the unethical act done by Enron executives as the company was headed toward bankruptcy?
Selling their stock while telling employees and the public to buy
Which rival company did Enron attempt to merge with in late 2001?
Dynergy
List a factor driven by the rise of Enron stocks.
Energy trading
Expansion of new markets
Attractive to investors
Public perception
What was the public agency created from the SOX act called?
The Public Company Accounting Oversight Board
Why were board members unable to be independent and neutral?
Conflict of Interest
Arthur Andersen's creation of a "shred room" for Enron documents exemplifies what type of ethical and law violation?
Obstruction of justice
Which accounting method ultimately led to Enron’s bankruptcy?
Market-to-Market
Who was the whistleblower that alerted the higher-ups about the fraudulent accounting practices which led to an SEC investigation, exposing the financial schemes of Enron?
Sherron Watkins Vice president of Enron
What do the PCAOB’s responsibilities consist of?
Registration
Inspection
Standard-setting
Enforcing regulations
What were the effects of inadequate risk management practices?
Company engaged in highly speculative trading and investment
Type of ethical failure was displayed by Enron when they manufactured energy blackouts in California to benefit themselves at the expense of the public?
Lack of Corporate Social Responsibility