Enron Scandal And Its Impact On The Economy Essay

The Enron scandal was the largest corporate financial scandal ever when it emerged. It took the economy the better part of a year to recover from the damage the Enron controversy caused to the US as a whole. Enron is not fully responsible, but it was a large contributor to the collapse of the stock market in the early 2000’s. In the year following the 9/11 hit to our country and economy the DOW lost close to 4500 points; down to 7500 from almost 12000, it did gain some back, but considering the great depression was only a decline of 2000 points or so, this is obviously a considerable impact on the economy. WorldCom and Tyco, also contributing to the large impacts on the economy, followed the Enron scandal abruptly. However, stock inflations such as these occurring across the entirety of the economy are probably responsible for the sudden jump of the DOW over 10,000 points back in 1998. Corporate fraud against investors and the government cannot continue. Practices as important and flexible as accounting should be conducted hand in hand with moral and ethical codes and obligations. The Enron scandal was the first of its kind, the largest chapter 11 bankruptcy in history. The subsequent events following the bankruptcy will spotlight most of the corporate system. Since Enron went bankrupt everything from banks to brokers and auditors to analysts have been put on trial for defrauding the entire US investment system. Enron was born in July of 1985 with a merger of HoustonShow MoreRelatedEnron Essay1433 Words   |  6 Pagesthe Causes and Effects of the Enron Accounting Scandals Name: Do Minh Tam Class: MEP 100 Lecture: Karen Bird Date: December 24, 2010 Introduction Background From the 1980s until now, there have been a lot of accounting scandals which were widely announced on by media. The result of this situation is many companies were bankruptcy protection requests, and closing. 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