Review of Enron 12-5-2023

Multiple Choice

Is the act of reporting unethical or illegal actions by one’s superiors or peers to authorities or to the media.  They can sometimes be viewed as traitors by their employers and co-workers.

• Referee

• Stakeholder

• Accountant

• Whistleblower

Multiple Choice

What happened in the ENRON scandal?

• the company cooked the books sand pulled of shady accounting tricks

• the company donated its funds with its custumers

• lost of income to the shareholders

Multiple Select

How did ENRON trick people to invest in their stocks?

• used mark to market accounting( recognizing profit that is not profit)

• they put their liabilities in other side companies

• auditors were bribed

• all of the above

Multiple Choice

What rules are made after the incident?

• All auditors have been fired to prevent future scandals

• auditors have stricter rules and CEO and CFO have to certified statements to prevent backing out

• All energy companies have put to shutdown for inspection if other energy companies are included

Multiple Choice

When employees were being told to buy shares, the officers of Enron were ______________________.

• retiring

• selling their stock

• making hundrends of milions

• all the above

Explanation Slide...

The Sarbanes-Oxley Act (2002) is a legislative response to corporate accounting scandals, such as Enron and WorldCom. It was enacted to improve corporate governance, enhance financial transparency, and restore investor confidence. The act introduced various reforms, including stricter financial reporting requirements, increased penalties for fraudulent activities, and enhanced internal controls. While it does address penalties and internal controls, its primary purpose is to address corporate accounting scandals.

Multiple Choice

What is the Sarbanes-Oxley Act (2002)?

• A legislative response to corporate accounting scandals

• A collection of tools and penalties to punish offenders

• A report on the effectiveness of internal controls

Multiple Choice

What was Enron's primary business?

• Real estate development

• Retail operations

• Telecommunications

• Energy trading