ACC 260 Week 2 The Enron and WorldCom Scandals Material A+Grade
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Assignment: The Enron and WorldCom Scandals
• Resource: Business & Professional Ethics
• Due Date: Day 7 [Individual forum]
• Review the accounts of the Enron and WorldCom scandals in Ch. 2 of the text:
o Enron’s Questionable Transactions on pp. 96-107
o WorldCom: The Final Catalyst on pp. 114-118
• Answer the following questions using complete sentences:
o Enron: 1, 3, 5, 6, and 9 on pp. 106-107
o WorldCom: 1, 3, 4, and 5 on p. 118
• Post your answers as an attachment. Clearly label the case and question number for each of your responses.
Enron questions 1, 3, 5, 6, and 9
1. Which segment of its operations got Enron into difficulties?
The first thing that got them into trouble was the fact that Kopper was appointed to Fastow and he was an employee of Enron. I do not believe that he had the best interest involved. Another thing was that over 11 million was suppose to be invested and it never was. I believe that this was the start of the problems!
Another thing was the fact that Enron was incorrectly booking revenue for services that was not yet done.
Enron stocks were paid by promissory notes and not cash.
3. Did Enron’s directors understand how profits were being made in this segment? Why or why not?
No I do not believe that Enron directors understood how the profits were being made. I think that if they understood something would have been done about it.
5. Ken Lay was the chair of the board and the CEO for much of the time. How did this probably contribute to the lack of proper governance?
With the lack of proper governance was the down fall of the company. Any CEO should know what is...