Essay --

IntroductionTrust is a very important concept in account. According to the American Institute of Certified cosmos Accountants (AICPA) explanation is a service activity. Its function is to provide quantitative information, primarily financial in nature, about economic entities that is int block uped to be useful in fashioning economic decisions, in making reas iodined choices among alternative courses of action. These economic decisions are made by companies, stockholders, consumer, and many other parties. These decisions have to do with money, and so at one time impact the lives of everyone who puts their trust in accountants to paint an accurate financial picture on which these parties make their decisions. However, sometimes it can be beneficial to one caller to paint an inaccurate picture, or in other words, report false financial information. This is where accounting scandals come into play. Sometimes big companies use accounting reports to brood about their finances to l iving making money. One very notable and infamous instance where such an accounting scandal occurred was with Enron from the late mid-nineties until the end of 2001. Background informationEnron Corporation was born in 1985. The government had started deregulation of natural gas pipelines, and Houston Natural Gas and InterNorth, two existing companies unite to name Enron. The deregulation of the gas pipelines however, caused Enron to not have exclusive rights to pipelines and because of the merger, Enron had a lot of debt. To keep itself planless the company needed a new art outline to get cash flowing and profits coming in. Kenneth Lay was the CEO of Enron at that point, and he hired Jeffery Skilling, who dealt with asset and liability management, as a consultant to co... ...of the largest accounting firms in America, in charge of auditing Enron then became involved, and destroyed any of Enrons documents that could prove that they were breaking the law. Consequences and Concl usionIn the end, Enron could not keep itself afloat once it turned to fraud. Shareholders lost $74 billion, thousands of employees and investors lost their retirement accounts, and many employees lost their jobs. Lives were ruined. Lay died before serving time. Skilling got 24 years in prison. Fastow concord to become an informant and therefore got less time in prison. The company filed for bankruptcy. Arthur Andersen was found guilty of falsifying Enrons account and destroying evidence, and the firm failed. hoi polloi be quiet talk about the Enron scandal today, and accounting practices are now held to a higher standard in order to avoid a denouement care this again. Essay -- IntroductionTrust is a very important concept in accounting. According to the American Institute of Certified Public Accountants (AICPA) Accounting is a service activity. Its function is to provide quantitative information, primarily financial in nature, about economic entities that is int ended to be useful in making economic decisions, in making reasoned choices among alternative courses of action. These economic decisions are made by companies, stockholders, consumer, and many other parties. These decisions have to do with money, therefore directly impact the lives of everyone who puts their trust in accountants to paint an accurate financial picture on which these parties make their decisions. However, sometimes it can be beneficial to one party to paint an inaccurate picture, or in other words, report false financial information. This is where accounting scandals come into play. Sometimes big companies use accounting reports to lie about their finances to keep making money. One very notable and infamous instance where such an accounting scandal occurred was with Enron from the late 1990s until the end of 2001. Background informationEnron Corporation was born in 1985. The government had started deregulation of natural gas pipelines, and Houston Natural Gas and Int erNorth, two existing companies merged to create Enron. The deregulation of the gas pipelines however, caused Enron to not have exclusive rights to pipelines and because of the merger, Enron had a lot of debt. To keep itself afloat the company needed a new business strategy to get cash flowing and profits coming in. Kenneth Lay was the CEO of Enron at that point, and he hired Jeffery Skilling, who dealt with asset and liability management, as a consultant to co... ...of the largest accounting firms in America, in charge of auditing Enron then became involved, and destroyed any of Enrons documents that could prove that they were breaking the law. Consequences and ConclusionIn the end, Enron could not keep itself afloat once it turned to fraud. Shareholders lost $74 billion, thousands of employees and investors lost their retirement accounts, and many employees lost their jobs. Lives were ruined. Lay died before serving time. Skilling got 24 years in prison. Fastow agreed to become a n informant and therefore got less time in prison. The company filed for bankruptcy. Arthur Andersen was found guilty of falsifying Enrons account and destroying evidence, and the firm failed. People still talk about the Enron scandal today, and accounting practices are now held to a higher standard in order to avoid a catastrophe like this again.