Audit systems, Financial Management

Assignment Help:

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.


Related Discussions:- Audit systems

Baumol, To what extent does empirical evidence on corporate objectives supp...

To what extent does empirical evidence on corporate objectives support the predictions of Baumol’s “Sales Maximisation Hypothesis?”

OPERATING CYCLE, Discuss the applicability of an operating in vegetable gro...

Discuss the applicability of an operating in vegetable growing business in Uganda.

Benefit and drawback of maintaining many manufacturing sites, Discuss the b...

Discuss the benefits and drawbacks of maintaining multiple manufacturing sites like a hedge against exchange rate exposure. Answer:  To set up multiple manufacturing sites can

Features of capital budgeting decisions, Features of Capital Budgeting Deci...

Features of Capital Budgeting Decisions 1.       Existence of potentially large anticipated profits. 2.       Involves a comparatively high degree of risk 3.       Exist

What is debentures, Q. What is Debentures? Debentures a debenture is an...

Q. What is Debentures? Debentures a debenture is an instrument issued by the company acknowledge its debts to its holders . it is also an important method of raising long terms

Financial management, Financial Management: Financial management is, in...

Financial Management: Financial management is, in its most basic interpretation, the management of costs against revenue. Other management initiatives, such as marketing, are d

Manage an assignment, Manage a project or clearly defined piece of work fro...

Manage a project or clearly defined piece of work from beginning to end. This may include setting up a budgetary system.

Evaluate alternative hedging strategies, Peak Inc. needs to order Canadian ...

Peak Inc. needs to order Canadian raw materials to use in its production process. The Canadian exporter typically invoices Peak in Canadian dollars. Assume that the current exchang

Explain about the primary and secondary markets, Explain about the primary ...

Explain about the primary and secondary markets. Primary and secondary markets: A primary market is a financial market wherein new matters of financial securities (both s

Short terms working capital, Q. Short terms working capital? 1) Indige...

Q. Short terms working capital? 1) Indigenous bankers: private money leased and other country banking used to be the only source of finance prior to the establishment of the

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd