Homework Writing Help on Enron Case

Enron Case

            As the appointed auditors of Enron, Arthur Andersen were supposed to provide accurate and unbiased financial reports to Enron. These audit reports were important to Enron’s creditors, investors, board, and employees, as they provided them with vital information to enable them make decisions about extending credit, investing in the company, deciding on the future direction of the company, and assessing the security of their jobs. Arthur Andersen were also involved in advising and consulting work for Enron management on how best to maintain legitimate debts of the corporation’s balance sheets.

            The insider trading of Enron executive harmed the top management who chose short-term financial gains and stakeholder deception at the expense of their reputation. Institutional and individual investors were also harmed by being misled about Enron’s financial performance, and as a result lost millions of dollars. Employees were also harmed because they remained in the dark regarding Enron’s actual financial position. They were also denied their right to exercise freedom when it comes to diversifying a person’s retirement portfolio, as it happened when the stock in their 401 (k) account was frozen and subsequently lost value.

            Misvaluing of subprime mortgages benefited mortgage brokers, large mortgage finance companies, and bankruptcy lawyers, while borrowers of subprime mortgage loans were the main losers. Andrew Faslow’s dual roles as Enron’s CFO and as managing partner of Enron’s SPEs harmed Enron itself. In this case, the SPE deals saw Enron trite-down its equity value by a billion-dollar, even as Faslow made a staggering $ 30 million in earnings from Enron-SPEs partnerships. Arthur Andersen, Enron’s auditors, and consulting advisors were also harmed by Faslow’s dual roles. The company lost its credibility and was bankrupt for failing to meet its professional billing as a gatekeeper.