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Enron Corporation Term Paper

2942 words - 12 pages

Enron Corporation: THE RISE AND FALL; ACCOUNTING SCANDAL
Submitted To: Professor Bill Bristol
Submitted By: Kenneth Rhodes, Jr.
Metropolitan College of New York (MCNY)

TABLE OF CONTENTS
I. ABSTRACT...............................................................................................................................2
II. purpose and service....................................................................................................3
III. HistorY............................................................................................................................3-5
IV. The ...view middle of the document...

The energy company was awarded “Americas Most Innovative Company” for six consecutive years.
The firm is most known for its collapse due to an internal planned accounting fraud, known since as the Enron Accounting Scandal. The company is now looked upon as one of the best examples on willful corporate corruption and fraud. The Enron Scandal brought forth the question of corporations accounting principles, which resulted in the creation of the Sarbanes-Oxley Act of 2002. In the end of 2001, Enron Corporation filed for bankruptcy protection in the Southern District of New York ( F. D. Beck, July 2002, pp. 6-8).

II. purpose and service
The Enron Corporation gave service to its customers by transmitting and distributing electricity and natural gas throughout the United States. Enron constructed, maintained, and operated power plants and pipelines while operating under legal circumstances and worldwide infrastructure. Enron’s large network of natural gas pipelines stretched ocean-to-ocean, and border-to-border. These included Northern Natural Gas, Florida Gas Transmission, Trans western Pipeline Company, and lastly included a partnership in Northern Border Pipeline from Canada (L. Fox, July 2003, pp. ii).
III. History
The Enron Corporation was the successor of the Houston Natural Gas Company (HNG), formed by Kenneth L. Lay. The company was internally reorganized in 1985, and merged with a natural gas company called InterNorth. HNG’s original Chief executive officer (CEO) Kenneth Lay, was able to take the leadership positions including chairman and CEO of the newly merged company with the departure of the InterNorth CEO Samuel Segnar. The InterNorth natural gas company was based out of Omaha, Nebraska. The acquisition in 1985 formed an interstate and intrastate natural gas company with approximately 37,000 miles of gas. The newly merged companies initially took forth the name of HNG/InterNorth Inc. In 1988 company saw great opportunity and made a strategy shift to purse unregulated markets in addition to its regulated pipeline business.
Enron’s Trans western Pipeline was the first merchant pipeline in the United States to stop selling gas and become a transportation-only pipeline in October of 1989. The company also made its first Initial Public Offering (IPO) by selling 16 percent of Enron Oil & Gas to the public during this time. Also, Lay decided to move the company’s headquarters to Houston Texas while changing the name of the business to Enron. The firm started to change the “business function” and strategy as they started to sell major assets. Investors and financial analysts said that the business was accumulating a large amount of debt. At the same time, the company became a less diversified firm by selling some of its larger assets that they had accumulated from buying up other energy businesses (L. Fox, July 2003, pp. iv).
In June of 1990, Jeff Skilling joined Enron after leading McKinsey & Co.’s...

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