Description: Well it was one of the most spectacular corporate failures of this century, the sudden decline of Enron. The crash of this company put thousands out of work, ruined their pensions and left stockholders holding worthless shares in a former stock market darling. As well, Enron took down one of the world’s largest accounting firms, Arthur Andersen, for its part in the scandal. This week Enron’s sad story came back into focus when its former CEO, Jeffrey Skilling, was released from custody after spending 12 years in jail and 6 months in a community facility. Jeffrey Skilling’s original sentence was for 24 years with $45 million in fines. In 2013, Skilling received a sentence reduction.
Date: February 22 , 2019
1) In the past few years, we have moved farther and farther away from the time of the Enron Scandal. At one time a professor who wanted to start a discussion on ethics could easily fall back on the Enron story. But is that still the case? If you are currently at university, does the name Enron mean anything to you? If so, what did you know about the story?
2) How would discussing the Enron story help students in learning more about professional ethics?
3) On page 76 in Wiley’s Financial Accounting: Tools for Business Decision-Making you can read about an important accounting assumption called “going concern.” Why is this assumption so important to the preparation of financial statements?