Enron : How did the members of the accounting firms violate the standards of integrity and credibility?Do you believe the new standards that resulted from the Enron scandal to be adequate?

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Enron

Regarding Enron, this was a company that resulted in the creation of the Sarbanes-Oxley Act and many reforms to the accounting profession. Research the company and answer the following questions.

1. How did the members of the accounting firms violate the standards of integrity and credibility?

2. Do you believe the new standards that resulted from the Enron scandal to be adequate?

3. Name and explain two aspects of the Sarbanes – Oxley Act of 2002.

4. Using the 2000 Enron 10-K, calculate 2 years of the following liquidity, solvency and profitability ratios.

  • Include your calculations and analysis for these ratios and what they tell you about the company.
    Liquidity: Current ratio, Accounts receivable turnover
    Solvency: Debt to assets ratio, Times interest earned
    Profitability: Profit margin, Earnings per share