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

Cash flow statement, Given below are the cash flows of a project. Find out ...

Given below are the cash flows of a project. Find out the net present value of the project. Cost of capital is 18% and initial investment is Rs. 2,00,000. Year Cash Flows (lakhs)

Case study - danish mortgage bonds, (a) The subsequent is a discussion base...

(a) The subsequent is a discussion based upon IFR Special Report in issue 1239 during the Year 1998. Danish mortgage bonds have extended been domestic investors' referred d

Evaluate the vulnerability, Assume you are a professional financial analyst...

Assume you are a professional financial analyst working for a wealthy investor.  Your client has $2.6 million to invest and wants to sink it into a single stock (diversification is

Restrictions on investments, Restrictions on Investments: A mutual fund...

Restrictions on Investments: A mutual fund scheme shall not invest more than 15% of its NAV in debt instruments issued by a single issuer, which are rated not below investment

Financial Management, Financial Management Initial Disclosures During the ...

Financial Management Initial Disclosures During the process of discussion and negotiation with the client with regard to the financial affairs and the manner of operations of the

Examine the concepts related to financial management, Assume you are a prof...

Assume you are a professional financial analyst working for a wealthy investor.  Your client has $2.6 million to invest and wants to sink it into a single stock (diversification is

Bajaj Electronics, 1. How would you judge the potential profit of Bajaj Ele...

1. How would you judge the potential profit of Bajaj Electronics on the first year of sales to Booth Plastics and give your views to increase the profit?

Show the advantages of irr method, Q. Show the Advantages of IRR Method? ...

Q. Show the Advantages of IRR Method? Advantages of IRR Method:- (i) Similar to the other DCF methods IRR methods as well take into consideration the time value of money.

Institutional clearing member, Institutional Clearing Member (ICM) A Fi...

Institutional Clearing Member (ICM) A Financial Institution has to subscribe to at least 100 equity shares of Rs.10,000 each to become an Institutional Clearing Member of COFEI

Estimate the average beta of investment in the t-bills, You know that Treas...

You know that Treasury bills have a beta of 0 because they are risk-free.  A portfolio of technology stocks has a beta of 3.  You plan to invest 40% of your investment capital in T

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