Enrons Financial Mistakes

Enron 's Financial Mistakes

Introduction

The history of accounting scams is as old as accounting and in the past it was mostly , if not all , unintentional and less crooked . But , when fraudulent accounting practices were found as a means to favorably convert financial information , efforts were started to think seriously about the techniques of misstating the statements and intentionally deceive the stakeholders , especially investors . The accounting scams in the US such as Enron and WorldCom have attracted the attention of professionals as well as general public from every nook and corner

of the world . The collapse of Enron , the seventh largest corporation in the country , as a result of accounting scams , was a real shock to the entire business community in general and accounting professionals in particular and the first of its type in the history of the country . The WorldCom one of the biggest telecommunication corporations was found committed accounting fraud during 1990s and that led to its eventual bankruptcy In March 2002 , the U .S . Securities and Exchange Commission (SEC enquired for information on accounting practices and the loans it extended to the officers from WorldCom . In April 2002 , Standard Poor 's , Moody 's and Fitch downgraded WorldCom 's credit ratings soon after the company cut 3 ,700 jobs . The U .S . Justice Department has launched an independent probe into the WorldCom scandal and it finally came out with the stunning report that many of the accounting practices of the company were of crooked and deceptive in nature...