公司的员工认为自己是最好的。他们认为他们足够聪明来掩盖公司的所有瑕疵。按市值计价的会计是由Jeffery Skilling，导致公司报告虚假盈利没有实际现金流量。Andrew Fastrow介绍，特殊目的实体未妥善管理。他认为，复杂的财务结构和财务报表将有助于公司摆脱犯罪，但事实是，安然公司无法隐瞒债务或损失。在安然破产案的另一个重要的人就是Kenneth Ray曾滥用公司资产享受他的生活。他的家人滥用公司的钱，肯尼斯本人也参与隐藏公司的实际财务状况。
The employees of the company thought of themselves as being the best. They thought that they were smart enough to hide all the flaws of the company. The mark to market accounting was introduced by Jeffery Skilling, which lead the company in reporting false earnings without actual cash flows. Andrew Fastrow introduced Special Purpose Entities which were not managed properly. He believed that complex financial structures and statements would help the company to get away with the crime but the truth was that Enron could not hide the debts or the losses. Another important person behind the bankruptcy of Enron is Kenneth Ray who misused the company’s assets to enjoy his life. His family abused the company’s money and Kenneth himself was involved in hiding the actual financial condition of the company.
The downfall of Enron affected twenty one thousand employees who lost their jobs. This resulted in the loss of steady income. After the Enron scandal, a UD federal law Sarbanes-Oxley Act came into existence. This law had several standards to regulate accounting in firms.
Enron paid its employees in stocks. This was an impetus to the employees to do anything and everything to increase the stock prices. Hence the employees started resorting to unethical practices which would undoubtedly increase the stock prices in the short run but it proved to be fatal for the existence of the company.
Mark to market accounting was a very good way of showing earnings in papers when actually the company was bleeding and was in huge debts. One wrong decision led to another and eventually the company found itself in a precarious situation from where it was very hard to revive.
Companies like Enron which pays its employees in stock options should incentivize the employees only when the employees have exercised their idea in practical and have helped the company earn profit in monetary terms and not only on the papers. The companies should carry out internal auditing from time to time so that the health of the firm is intact. Malpractices, if any, should be dealt with severe punishments. The company should have a clean book. The company should select appropriate accounting approach and financial structure which is easy to understand.
It can be concluded, that once a company resorts to malpractices then it becomes very difficult for the company to come out of it. The accounting process should be clean and should follow standards so that the company does not face any financial risk in future. It is very important to keep the employees happy but it should not be done at the cost of company’s financial health. it is very difficult for the companies to hide the facts and figures from the stakeholders hence the companies should promote fair and just representation of facts and figures.