Forensic Accounting The Energy Company Enron - 1765 Words

In 2001, the energy company Enron was involved in one of the biggest corporate accounting scandals of the 21st century. The company had covered up large amounts of debt to make their financial statements look more appealing to investors; consequently, after the fraud was discovered, many people lost their investments and many employees lost their jobs, including the corporation’s CEOs. After the authorities had been alerted that illegal activities were possibly taking place within Enron, forensic accountants were brought in to determine whether the allegations were true. Forensic accounting, or fraud auditing, is the analysis of financial data to investigate situations involving such things as economic damages, hidden assets, and†¦show more content†¦By covering up large amounts of debt or increasing the number of assets shown on their financial records, corporate officers believe that they can convince stockholders and investors to contribute more money and support t o their companies. Although some people commit fraud to help their business, others do so to harm a former or rival business. Frauds committed by managers or employees of a business are usually internal; those committed by suppliers, third parties, and customers are external. If fraudulent activity occurs internally, then the business usually receives a benefit (e.g. price fixing, overstating profit, tax evasion). Contrarily, external fraud causes harm to the business while only the perpetrator receives the benefit. Examples of this include embezzlement and asset theft, as well as bribery of the business’ employees by competing corporations. Crimes such as â€Å"arson for profit, planned bankruptcy, and fraudulent insurance claims† do not adhere to these categories because they are typically internal activities that hurt the business; however, they should be noted as significant nonetheless (Singleton et al. 21). Disgruntled employees and desperate business owners will sometimes act against their business if they believe that it will lead to the greatest monetary gain. Insurance scams are a po pular form of fraud because it allows thoseShow MoreRelatedForensic Paper1628 Words   |  7 PagesRunning head: Forensic accountant 1 Forensic Accountant Dr. Gina Zaffino Bus 508, Contemporary Business 11/16/2012 Running head: Forensic Accountant 2 Determine the most important five (5) skills that a forensic accountant needs to possess and evaluate the need for each skill. 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It is a number of these questionable, and in some cases straight out fraudulent, accounting practices that pertained to the most dramatic collapse of a major company in years. An analysis of some of these accounting practices brings to light the problems with the use of concepts such as mark-to-market accounting and the use of special purpose entity’s (SPE’s). To say that the collapse â€Å"seemed to be aRead MoreReport on Corporate Frauds in Bangladesh5564 Words   |  23 PagesUniversity of Dhaka SUBMITTED TO Tahmina Ahmed Lecturer Accounting amp; Information Systems University of Dhaka SUBMITTED BY Group 18 Date of submission:10.11.14 Group members Name | ID | 1.Sajjad Hossain Sohan | 18022 | 2.Rubina Akther | 18048 | 3.Mohammad Saadman | 18052 | 4.Rumi Akther | 18066 | 5.Hilary Talukder | 18099 | November 5, 2014 Tahmina Ahmed Lecturer Dept. of Accounting amp; Information Systems University of Dhaka Subject: