What was the conflicts of interest in Enron's SPE activities, Arthur Andersen's activities, and Enron's Executive activities? I think the executive activities were winner takes all, every person for themselves, and what I do not know will not hurt me. How am I doing so far? I raelly need help with this question. Please HELP ME!!!!!!
Did you read those sites very carefully? Our job is to show you where to look, but not to provide the answer. Let me reread those sites to see if I can summarize it for y ou.
Sra
Essentially Enron created ways to use the SPE's that had never been used before. The original purpose was sound and creative but Fastow and Kopper got involved in high-risk to hedge investments. Enron held put options and a note receivable while SPE h eld the stock. The true and economic losses were never reflected in the income statement. The appreciation of the stock offset the losses only from an accounting standpoint. The CFO and some Enron employees received huge returns on their investments. As the debt was shielded, it took time for this "house of cards" to fall. Yes, it's deceit and greed. Watch how the laws will cease being to lax after this.
Sra
if it doesnt apply it isnt for you:......but whenever i have a question on an assignment, which is not often, whenever i look on this site all i see is smart remarks and sly comments. in any assignment there is more than 1 question so what makes you think your one answer is "doing my homework" either answer the question or keep your smart remarks to yourself.
You're on the right track in identifying some of the issues related to conflicts of interest in the Enron scandal. Let me break down the conflicts of interest in Enron's SPE activities, Arthur Andersen's activities, and Enron's executive activities that you mentioned.
Enron's SPE (Special Purpose Entity) activities involved setting up off-balance sheet entities that allowed the company to move debt off its books, thereby making its financial position appear better than it actually was. The conflict of interest here was that Enron executives had a personal stake in these SPEs and used them for their own financial gain. They were able to manipulate the financial statements, hiding debt and inflating profits, which ultimately misled investors and the public.
Arthur Andersen, Enron's accounting firm, also had conflicts of interest. They not only provided audit services to Enron but also earned substantial consulting fees from the same client. This dual role compromised their independence and objectivity as auditors, leading to a failure to detect and report the fraudulent activities at Enron. In this case, the conflict arose from the financial interests of Arthur Andersen, as they had more to gain from providing consulting services rather than uncovering financial irregularities.
Regarding Enron's executive activities, you mentioned that it was a winner takes all, every person for themselves situation, where ignorance was bliss. This description highlights some aspects of the conflict of interest among Enron executives. The company had a highly competitive and performance-based culture, which encouraged aggressive risk-taking and unethical behavior. Executives were primarily focused on their own personal financial gains and were driven by incentives tied to the performance of Enron's stock, such as stock options. This led to a disregard for ethical considerations, transparency, and accurate financial reporting.
To fully understand the conflicts of interest in Enron's SPE activities, Arthur Andersen's activities, and Enron's executive activities, it is recommended to conduct further research and analysis. This can involve studying the specific roles and responsibilities of key individuals, examining financial statements, and reviewing reports and investigations related to the Enron scandal.