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
what is financial management?

Why do firms enter an industry when they know that in the long run economic profit will be zero? Firms enter an industry while they suppose to earn economic profit.  These shor

Suggestion Regarding Credit Limit Should It Be Approved Or Not What Should Be The Ammount Of Credit Limit That Electronics Give To Booth Plastics

What does the “weight” refer to in the weighted average cost of capital? The weight considered to in weighted average cost of capital consider the portion of the total capital in

Event studies are one of the most powerful and widely used applications of the capital asset pricing model (CAPM). An event study is an attempt to determine whether a particular ev

Calculation of before-tax return on capital employed Total net before-tax cash flow = 122 + 143 + 187 + 78 = $530000 Total depreciation = 250000 - 5000 = $245000 Average

Determine the operating cash flow: E4-1 The installed cost of a new computerized controller was $65,000. Calculate the depreciation schedule by year assuming a recovery period

Compare and contrast the potential liability of owners of proprietorships, partnerships (general partners), and corporations. The sole proprietor has limitless liability for ma

In convertible bonds, bondholders get a right to convert their bonds for a specific number of shares of the bond issuer. This privilege allows bondholders to take

Q. Describe Factors to Analyze a Company position? - Venture capitalists may be involved in the business because of its significant growth but poorly structured finance. An equ