Questionable Accounting Leads to The Collapse Essay

Questionable Accounting Leads to The Collapse - Essay ExampleSimilarly, in financial studies reporting plays a real important part not only when to the companys point of view scarcely besides from the point of view of public and investors. So financial reporting is actually a very important matter not only for the companies who develop the reports and send them out, barely in fact also for the investors, consumers, business partners, competitors, other agencies as well as general public who read the reports and analyze it to bear their decisions. With the help of financial statements in these reports a company actually represents their surgical procedure to the stakeholders. They do not only tell their activities and philosophies in detail but also explain the vision and future plans as well. At the same time they try to enhance their reputation as well. And lastly but most importantly the managers show accountability of their work and decisions to the stakeholders through th ese financial reports. So if the reporting by these companies is not exact a lot of such decisions sight become wrong. As all the stakeholders of the company rely on these reports to forecast the surgery of company and for answering their questions like what and how they will be performing in future. This compositors case is actually termed as the distinguishing point of entirely new era of ethics in financial reporting. in front the Enron case, there were no such laws related to financial reporting and internal and external auditing etc. tho the Enron case raised the importance in making ethics necessary in this field as well, but it also enabled the development of regulatory bodies that enforced the ethical practices in the financial reporting as well. Before the Enrons scandal, there was very little, in fact no public attention on the truthfulness of the financial reports published by the companies. Yet people have suspicions about misrepresentation but mostly didnt affect the decision making of public and did not indulge them on dark research and analysis. But after the Enron case, it became necessary that these reports should be certified by some public controller who would ensure that whatever cultivation is presented in financial reports are truthful and these statements must represent the true(a) picture of the company. So this scandal played a vital role in the legal development of laws in the field of financial reporting and auditing. Further, it gave rise to the ethical role of management for providing the public the information based on truth. ENRONS CORPORATE CULTURE Enron gained a lot of popularity in the 90s due to its superfluous ordinary earnings and its name was listed in the Fortune 500 companies. Their management felt proud of their performance and considered them the best in the industry. The management and executives believed that they are consumeing by a very big lead from their competitors and that their competitors have no chance to even come near their performance standards. They were so proud of their performance that they did not fear to take any degree of risk for their projects as they believed that they can handle it easily. The executives took the meetings prosperous and the focus of top management was on how to generate more money for the executives in spite of how they can