Enron and Arthur Anderson - Research Paper Example

In 1986, Enron moved its headquarters to Houston from Omaha. In 1990, Kenneth Lay was joined at Enron by Jeffery Skilling, his former consultant. Later, Jeffery Skilling would become the chief operating officer of the company (Fusaro and Miller 12). Andrew Fastow is Enron’s chief financial officer. Sherron Watkins is Enron’s vice president of corporate development. Jeffrey Skilling is the president of the corporation and Kenneth Lay is Enron’s chairperson (Eichenwald 5). Andrew Fastow is more than a minor actor in the Enron saga.

He develops discrete business entities that are not manifested in the chief financial statements of the company. It is Andrew Fastow who creates the complicated web of off-balance sheet corporations that permit Enron to conceal its authentic financial situation from shareholders (Eichenwald 31). In addition, through the dealings of the chief financial officer, the company is involved in a large number of offshore associations, a financial issue, and concealed more than $1 billion dollars in liability through some of these companies.

It is this complicated plan that causes its collapse. Sherron Watkins is perceived by numerous people as the whistleblower that has assisted in revealing the Enron saga. Sherron Watkins blows the whistle by warning the Kenneth Lay, Enron’s chairperson of the tremendous financial indiscretions in accounting reports (Eichenwald 32). Nevertheless, she has been critiqued for failing to speak up overtly earlier about her fear, as her memorandum does not get to the people until five months later.

Jeffrey Skilling is presumed to be careless and does not pose an intention of harming stakeholders but does not take the necessary precautions to protect them. The corporation adopts market to market accounting during Jeffrey Skilling’s leadership. This strategy predicts future earnings from any business will be given an explanation for by approximating their