Analysis of The Smartest Guys in the Room Documentary - Coursework Example

The last day of business came in 1998. During that period, Enron diversified its operation by taking part in the water sector which culminated in the creation of the Azurix Corporation. The business had part of its stocks floated on the NYSE in June 1999. a) They established numerous limited liability special purpose entities and allowed Enron to transfer the liability to their target so that it would not appear in its accounts. The decision enabled Enron to uphold a sophisticated and robust stock price that kept increasing therefore maintaining its essential investment rating and credit grade.

Such a fraudulent approach ensured that Enron did not report its losses and debts, besides its financial statements did not report losses and debts. Enron used several fraudulent accounting malpractice, bewildering, and deception to cover frauds that were supposed to be reported on their financial information. The entries depicted Enron as the most profitable organization contrary to the truth of the matter. That built the pressure to maintain the trend of profitability as earlier portrayed.

For this reason, it meant that corporate officers were required to perform more financial fraud each quarter to retain the illusion The hiring of Andrew Fastow as the Chief Financial Officer by Jeffrey Skilling who was the Chief Operating Officer played a significant role in the crafting and implementation of the entire scheme. The CFO had a good understanding of the burgeoning deregulated market, which the COO had the thirst to exploit. Therefore, Andrew Fastow began the establishment of several limited liabilities with the special purposes entity.

Although Andrew Fastow was the chief architect in the execution, others people individual who collaborated in hiding offshore losses were instrumental in the execution as well.