Enron Week 3 Read and respond to ATC 7 7 on page 285 This situation is similar to the Enron scandal from several years ago Use the Ashford Online Library to research Enron accounting procedures In your post discuss how these accounting procedures affected the company and stockholders You must respond to at least two of your classmates postings to receive full credit According to finance laws com 2012 The Enron Scandal is considered to be one of the most notorious within American history Due to the actions of the Enron executives the Enron Company went bankrupt By misrepresenting earnings reports while continuing to enjoy the revenue provided by the investors not privy to the true financial condition of Enron the executives of Enron embezzled funds funneling in from investments while reporting fraudulent earnings to those investors this not only proliferated more investments from current stockholders but also attracted new investors desiring the enjoy the apparent financial gains enjoyed by the Enron corporation The loss sustained by investors exceeded 70 billion Furthermore these actions cost both trustees and employees upwards of 2 billion this total is considered to be a result of misappropriated investments pension funds stock options and savings plans as a result of the government regulation and the limited liability status of the Enron Corporation only a small amount of the money lost was ever returned http finance laws com enron scandal summary 2012 The Enron scandal was unethical and immoral Many people put their life savings into the company thinking that they would make a lot of money The clients were told that they were making money but the company was spending their money What makes it worse is that the main executives knew what they were doing and did not care I feel that this is a case of greed and stupidity When the heat was on them from the F B I and the I R S Enron actually started to shred paperwork In the end it cost them their jobs and prison time Several standards of the AICPA s Articles have been violated such as Article I Responsibilities which is carrying out their responsibilities as professionals members should exercise sensitive professional and moral judgments in all of their activities Edmonds Olds McNair Tsay 2010 Article II The Public Interest which is that members should accept the obligation to act in a way that will serve the public interest honor the public trust and demonstrate commitment in professionalism Edmonds Olds McNair Tsay 2010 Article III Integrity to maintain and broaden public confidence members should perform all professional responsibilities with the highest sense of integrity Edmonds Olds McNair Tsay 2010 Article V Due Care A member should observe the profession s technical and ethical standards strive continually to improve competence and the quality of services and discharge professional responsibility to the best of the member s ability Article VI Scope and Nature of Services A member in public practice should observe the principles of the Code of Professional Conduct in determining the scope and nature of services to be provided Edmonds Olds McNair and Tsay 2010 David Sheridan and the Enron scandal are alike David wanted more money and went about it the wrong way In order to start a business you have to have a lot of money to start and make sure that you manage your money the right way and log the money coming in and going out David s investors and creditors helped David get away with it because of the fraudulent reports of earnings for the embezzling of the money coming in This is just wrong and there are a lot of people that still do embezzling and get away with it Greed is a horrible disease to have It always gets you in the end References Edmonds T Olds P McNair F Tsay B 2010 Survey of Accounting 2nd edition New York McGraw Hill Irwin Enron Scandal http finance laws com enron scandal summary