Business law Essay Example | Topics and Well Written Essays - 2000 words - 3

Business law - Essay ExampleAfter its establishment, Enron had adopted along with executed certain unethical accounting techniques with the specific butt of hiding its liabilities and other loses during the growth of its stock hurt. During this time, various experts of the US already provided warning to the family about its increasing debt, but Enron avoided this and moved on to the instruction of its business by making substantial investments. The financial collapse of Enron was a lesson for the other business houses prevailing in the US1. With this concern, the assignment focused on generally discussing the unethical accounting practices conducted by Enron that make the party to face bankruptcy. The various responsibilities of the account practitioners in the companionship have been revealed in order to verify whether they ar liable for leading the company towards facing bankruptcy or not. The prime objective of this paper is to determine that the conduct of unethical accou nting practices had eventually made financial collapse of Enron. Case Background Enron had made a rapid growth since its formation. By the year 2001, it became the seventh biggest natural gas and electrical company in the entire region of the US. The s flockdal of Enron can be noticed for the reason of its increased level of earning business reputation and gaining substantial profits. After some(prenominal) years, Jeffery Skilling, the new CEO of the company appointed numerous skilled executives who were capable of hiding outstanding amounts that to be presented in the financial statements by using the methods of sorry financial accounting. The company filed for bankruptcy in the year 2001 after experiencing a long-run loss in its business. It has been viewed that an increment in the annual revenue of the company was only US$ 9 to US$ 10 during the period of 1995 to 2000. This represents the loss that suffered by the company while conducting its business. It can also be viewed tha t the stock price of the company had a drastic fall from $90 per share to $1 from the middle of the year 2000 and lasted up to 2001 which created a great loss for the shareholders. After this incident, Enron look into its financial statement for the last five years and came to realize a total loss of $586 million2. Due to this heavy loss, Enron filled bankruptcy on declination 2, 2001. It can be apparently observed that several problems faced by the company and its shareholders after the bankruptcy. In this regard, most of the employees of Enron were accused with charges and had been imprisoned. Enron lost a extensive figure of customers due to bankruptcy and also for a case which was running in the US Supreme Court. The court ordered to pay back the customers with partial tone return. Being unable to overcome all these losses and negative reputation, Enron failed to restore its previous position in the market where it operates. In relation to the case of Enron, it can be affirme d that there were several reasons for which the company had experienced bankruptcy. One of the major causes was the practice of unethical accounting practices that prevailed within the company. In this similar concern, the company adopted certain unplanned measures of financial reporting in order to hide the