Auditing Coursework Example | Topics and Well Written Essays - 750 words - 1

Auditing - Coursework Example The last day of business came during 1998. During that period, Enron diversified its operation by taking part in the water sector that culminated in the creation of the Azurix Corporation. The business had part of its stocks floated in the NYSE during June 1999. a) They established numerous limited liability special purpose entities and allowed Enron to transfer the liability to their target so that it would not appear in its accounts. The decision enabled Enron uphold a sophisticated and robust stock price that kept increasing therefore maintaining its essential investments rating and credit grade. Such a fraudulent approach ensured that Enron did not report its losses and debts, besides its financial statements did not report losses and debts. Enron used a number of fraudulent accounting malpractice, bewildering, and deception to cover frauds that were supposed to be reported on their financial information. The entries depicted Enron as the most profitable organization contrary to the truth of the matter. In fact, that built the pressure to maintain the trend of profitability as earlier portrayed. For this reason, it meant that corporate officers were required to perform more financial fraud each quarter to retain the illusion The hiring of Andrew Fastow as the Chief Financial Officer by Jeffrey Skilling who was the Chief Operating Officer played a significant role in the crafting and implementation of the entire scheme. The CFO had a good understanding of burgeoning deregulated market, which the COO had the thirst to exploit. Therefore, Andrew Fastow began the establishment of several limited liabilities with the special purposes entity. Although Andrew Fastow was the chief architect in the execution, other people individual who collaborated in hiding offshore losses were instrumental in the execution as well. Yes, I think that Enron manipulated the prices and the availability of power in the state of