Audit systems, Financial Management

Enron did not manages its trade account receivable in significant manner that made huge financial loss for the organizations. Hence, the management faced biggest fraud due to the failure of audit systems. This scandal did tack place due to the gap in the accounting systems of general accepted accounting principles. This scandal had been done by the auditor of the company by that the organization did not retain its balance sheet and it increased the level of confusion in the mind of investors and shareholders. The auditors did not able to present income level of the company, cash flow up, the values of asset inflation along with the liabilities off the books that reduced the transparency in the auditing system of the company (Greene, 2013). On the other hand, the auditors met with the top management of the company in limited time that also restricted them by taking each consideration related to regular checking about the condition of trading accounts.

The chief financial officer of Enron along with other executives misled the audit committee members and board of directors that increased the high-risk accounting practices that was very important for the auditors to reduce the risk. The organization also not disclosed its hearing process to the investors. The fraud was uncovered by Bethany McLean's in a meeting with the financial officers of the company. She pointed out that how the organization of Enron could manage its stock value in the market at that time, when its earning is below 55 times from earnings (Greene, 2013). She also commented that how the management of Enron provide the information to the investors and shareholders of the company related to the earning of the company at that time when the company is earning low revenues.

Posted Date: 4/3/2013 2:41:00 AM | Location : United States







Related Discussions:- Audit systems, Assignment Help, Ask Question on Audit systems, Get Answer, Expert's Help, Audit systems Discussions

Write discussion on Audit systems
Your posts are moderated
Related Questions
Contingency Planning:   Once the events are evaluated and categorised, and the levels of risk attaching to them have established.  The organisation should then commence pla

Enumerate the field of study dealing with finance The field of study dealing with finance was treated as encompassing three interrelated aspects of raising and administering re

A firm requires a clear policy regarding as to whether the credit should be authorized to a customer and if yes to what extent. Credit principles are set for making such decisions.

Describe in brief about  finance Managing this flow of funds resourcefully is the purview of finance. So we can describe finance as the study of the methods that help us plan,

Discount Rate Determinants The discount rate is the firm weighted average cost of capital. It represents the opportunity cost of investing creditors and shareholders funds in o

What is meant by Leverage? What are its different types? With what type of risk is associated with each type of leverage. (Explain with illustration)

•?Detailed information should form the part of your answer (Word limit 150 to 200 words). Case let 1 This case provides the opportunity to match financing alternatives with the nee

Crown casino recently announced its intention to build a new 500-room luxury hotel in Perth costing approximately $568 million. As part of the agreement, the WA government has agre

how would you judge the potential profit of Bajaj Electronics on the first year of sales to booth plastice and give your views to to increase the profit

Determine the Limitations of trade receivable day's ratio Year-end trade receivables may not be representative of the year. Credit sales are VAT exclusive in the Incom