My name is Seung Joon and I am going to take you through the introduction and the conclusion parts of the Enron Accounting Scandal. This scandal has been used as a case study by many students taking Finance, Law and Ethics because of its relevance and implications to accounting principles and ethics. It is often cited in business debates as one worst corporate scandal in America. The introduction highlights the background of the company and the scandal while the conclusion provides the summary of the key points in the presentation. The body shall be presented by Max, Minho and Kevin. Max shall review the firms involved, how the fraud was conducted and the outcomes. Kevin Minho shall tackle the effects of the scandal to shareholders and employees while Kevin shall discuss the measures that were taken to by the regulators to prevent future recurrence. Enron was an American energy, services and commodities corporation based in Houston Texas. The company was founded by Kenneth Lay through a merger of Houston Natural Gas and Inter-North in 1985. It owned and operated natural gas, paper, communications and pulp companies. In 1992, the company emerged as the top seller of natural gas and electricity in America. Throughout 1990s until 2000, the company was regarded as one of the most innovative and financially stable corporations in America. It stock prices grew by over 300%. By mid 2000, the company stock price was about $90 and it was valued at 139 billion dollars. This was about 13 times its value in early 1990s. In August 2001, an employee of Enron, Sherron Watkins informed Lay of the financial malpractices at the company after resignation of Jeffery Skilling. In November 2001, a review of Enron’s financial statement over a five year period revealed that the company had made a loss of 586 million dollars in the previous five years. In the same month of November, the company declared that it needs to financier to its 690 million dollars debts. These revelations caused the company share price to fall from $90 to less than $1. One of the most cited causes of Enron’s scandal was the adoption of complex market to market accounting. This accounting method did not report the real financial position of the company. The financial officers and auditing firm misrepresented earnings understated liabilities and overstated revenue. These accounting malpractices were done in full awareness of Kenneth Lay, Jeffery Skilling and Andrew Fastow who were the Chairman, Chief Executive Officer and the Chief Financial officer respectively.Conclusion Enron scandal was deliberately orchestrated by top executives of the company to hoodwink the shareholders that the company was in good financial position. Three players conspired to manipulate the balance sheet to reflect favorable financial performance. These included the employees, the board and the Arthur Andersen auditing firm. A number of factors were responsible for the scandal. These factors were conflict of interest, market to market accounting, aggressive performance reviews and the creation of special purpose entities for purpose of hiding debts. The scandal had huge social, financial and legal implications in America. It led to retrenchment, loss of shareholders' equity and tightening of accounting procedures. Apart from the implications, the scandal raised serious business ethical issues that are very difficult to address through legislation. The investigations revealed that the employees of top and middle level employees of the company were aware of the financial irregularities. However, they never reported the issue to regulatory authorities.