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Development of analytical Enron

2015-11-12 | 来源:51due教员组 | 类别:更多范文

51due英国论文代写网精选代写范文:“Development of analytical Enron” 安然公司成立于1985年7月,其主要业务战略涉及进入合同交付指定数量的天然气业务或公用事业。传统领域,尽管它的利润不是那么多的“新经济”,但它是稳定的。


Enron was formed in July 1985 whose primary business strategy involved entering into contracts to deliver specified amounts of natural gas to business or utilities. It’s conventional field, though its profit isn’t so much as the “new economy”, but it’s stable.

In early 1990s, Enron’s first change: the senior Enron officials were lobbied heavily, then business heavily involved in the brokerage of speculative energy futures. The external factor which caused this change is: deregulation of the electrical power markets.

In 1999, Enron’s second change: lauching web-based commodity trading site, also broadened its technological reach by buying/selling access to high-speed internet bandwidth. The external factor which caused this change is: this period is at the height of the internet boom.

Third change, and the riskiest change: expand business into extremely complex venture by offering a wide variety of financial hedges and contracts to customers. And the volume of “new economy” type instruments transactions had surpassed the traditional contracts of physical commodities.

So,
A.Enron changed business too rapidly and founded too many “new economy” affiliates. According to company life cycle theory, the start-up enterprise can’t earn expected profit till the maturity stage. Too much input demands, risk of funds chain rupture exists.
B.Enron entered the strange fields, need a large number of senior labor or resources which it couldn’t prepare enough for it (for example, to ensure managing “new economy” instruments, Enron hired many experts in many fields). According to SWOT theory when the optional strategy is related to rapid promotion of company ability within a short perild of time, the strategy may be unsuitable for it.
  C. Major personnel change further fueled the public skepticism and scrutiny over Enron operations. CEO (Jeffrey Skilling) resigned. Public media tense disclosure caused loss of confidence by trading partners, customes etc. They quickly dried up Enron’s trading volume, destroyed the trust thoroughly.

Whatsoever, the material misstatements by using SPEs to hide liabilities or overstate profits or transfer assets off BS; secret ganrantee of loans to let the creditors input cash into the company; secure investment of 3% value of the transferred assets (off-BS partners) like a bate, all were only the means, the essential purpose was to gloss over liquidity which was getting worse and worse, to cover serious management deficiencies or frauds.


5. What are the auditor independence issues surrounding the provison of external auditing services, intenal auditing services, and management consulting services for the same client? Develop arguments for why auditors should be allowed to perform these services for the same client. Develop separate arguments for why auditors should not be allowed to perform non-audit services for their audit clients. What is your view, and why?

My view is that the auditor cannot provide external auditing services, intenal auditing servicces, and management consulting services for the same client according to the current laws, regulations and discipline for it impairs auditor’s independence

But, before Enron & Andersen’s fall, it was the common practice. Andersen almost did all (external auditing services, intenal auditing services, and management consulting services) for Enron. When Andersen found the material misstatements and material deficiencies of Enron and notified it, they hadn’t issued adverse report or withdrawn or reported to the regulatory bodies, but instead of clean opinion. It was gross negligence. Of course Anderson got big income from it. 

There are some distinct differences between attest and nonaudit services (such as the management consulting services mentioned above). Attest services generally provide some form of assurance about the information which is being reported. The public often has a keen interest in the outcome of such services. Thus to provide attest services, accounting firms mush follow various independence requirements. For example, an audit opinion that is filed in a public company’s annual report (Form 10-K) is posted to the SEC’s web site and may be used by an unknown number of interest parties.

In a nonaudit service engagement, the accounting firm and the company’s management determine the nature and scope of the work. The services may result in findings, concludins, and recommendations, but generally would not provide assurance about the information being reported. Typically, nonaudit work is performed for the sole use and benefit of the client, and distribution of the results of the wok is often restricted to specified client parties.

If the auditor does non-audit services for the audit client, that is analogous to “One audits oneself.” The auditor cannot keep objectivity and independence which profession ethics request. There is conflict and has no meaning.

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