Regarding Enron, this was a company that resulted in the creation of the Sarbanes-Oxley Act and many reforms to the accounting profession. Research the company and answer the following questions.
Question
1: How did the members of the accounting firms violate the standards of integrity and credibility?
2: Do you believe the new standards that resulted from the Enron scandal to be adequate?
3: Name and explain two aspects of the Sarbanes – Oxley Act of 2002.
4: Ratio Analysis. Using the 2000 Enron 10-K, calculate 2 years of the following liquidity, solvency and profitability ratios. Include your calculations and analysis for these ratios and what they tell you about the company.
Liquidity: Current ratio, Accounts receivable turnover
Solvency: Debt to assets ratio, Times interest earned
Profitability: Profit margin, Earnings per share
