Working Essay

1691 WordsMay 14, 20137 Pages
ASSIGNMENT OF CSR ON “ THE FALL OF ENRON”. SUBMITTED TO; SIR UZAIR FAROOQ SUBNITEED BY; ABDUR REHMAN SHAHID ROLL NO; 010 CLASS; MBO-FA12 DATE OF SUBMISSION; 11-04-2013 Q: Who would you blame for Enron’s failure and why? Discuss with detail and support? The big corporate giants like Enron operate in an immense environment which obviously implies more duties and responsibilities to the stakeholder. In today’s severe competitive environment where a single minor mistake can shake the walls of the very foundation of the company no matter how strong and big it is, and no matter how hard and tough the company is can be taken down. There could be number of factors which participated in the demise of Enron like deregulation, arrogant culture, accounting malpractices, improper trade, and in my point of view the major contribution in this whole phenomenon was the deregulation process. When the powerful managers of big corporate giants know that they can do whatever they want just to maximize the profits for short period of time and at the end they can get away with all the falsified statements and misrepresentation, this endeavor leads to chaos, which is exactly the same reason the global financial crisis happened in first place. Some people mostly the Enron’s managers argued that the old economic accounting practices were to blame because the Enron management tried different accounting techniques like mark to market accounting and SPEs. These practices imposed various challenges for reporting and misrepresented the gains and losses. The questionable accounting practices firstly approved by the government in which Enron’s lobbyists played important rule. In this practice the company recorded the assets value at market prices rather than book value which was called the mark to market accounting. This practice posed the

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