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groups, operating
mainly in the USA. But in that year, the company
admitted that there had
been a number of financial reporting irregularities over
the period 1997 to 2000.
During 2001 it became apparent that a number of
special-purpose entities were not consolidated in the
balance sheet.
Consequently, earnings (reported profits) were
substantially overstated and in late 2001 the company
filed for bankruptcy.
During most of the 1990s Enrons stock price was
rising steadily.
During 1999 the stock price increased
dramatically and at the beginning of 2000 was
standing at over $70.
During 2000 the stock price peaked at justover
$90, but by the end of 2000 was standing at just
over $80.
During 2001 the stock price declined sharply and
by the beginning of December 2001 the stock
stood at less than $1.
In early 2001 Enron was ranked (on the basis of
Audit committee:
The audit committee of enron was ineffective, they were
Disclosure and Audit:
The problem with the Enron was that they
External corporate governance control:
Under Cadbury committee on corporate
governance:
There should be full and clear disclosure of their total
emoluments and those of the chairman, including
pension contributions and stock options. Separate
figures should be given for salary and performance
related elements and the basis on which performance
is measured should be explained.
Executive directors pay should be subject to the
recommendation of a remuneration committee made
up wholly or mainly of non-executive directors.
Sociological theory:
Sociological theory has focused mostly on board
The major audit firm Arthur Andersen became one of
According to many analysts, the following