Complete 3 page APA formatted essay: Question answering.However, at one point, all lies come to light and for Enron that moment was when they filed for bankruptcy.The aspect of the company filing for

Complete 3 page APA formatted essay: Question answering.

However, at one point, all lies come to light and for Enron that moment was when they filed for bankruptcy.

The aspect of the company filing for bankruptcy was one of the worst happenings in the history of the United States. Before the company filed for bankruptcy, the last bankruptcy case reported, which was known as the largest in the history of the United States was the 1987 Texaco Bankruptcy case. Texaco filed for bankruptcy with an asset level that was as high as $35.9 billion. There were several causes that were assumed to have caused this shift. Primarily, one of the key issues identified by the case as the cause of the flaws was the inappropriate accounting principles. Primarily, the accounting principles the company used were either flawed or / and unethically done.

Some of the issues encountered in the handling of the case are the fact that they went unnoticed for a number of years. One would ask, how can these happen and go undetected for years. Well, in most cases, such issues can easily be identified by anyone who analyzes the various financial reports. However, this was not the case for Enron Corporation. One of the key reasons that these mistakes went unnoticed by the management was the financial structuring of the organization. Enron had a risk management platform which they used a third party to insure themselves from loss. However, the downside is that Enron owned the largest shares in these third party institutions (LJM1 and LJM2). As such, by the time the organization was going broke, their insurer was also going broke.

However, this was not an accident. The structuring of the organization was purposely created this way, by a former executive vice president and financial and a few interested stakeholders. This way, the few interested stakeholders would financially benefit themselves at the risk of the shareholders of Enron. Any financial issue that counters an organization somehow roots itself