![]() ![]() Shareholders filed a $40 billion lawsuit after the company's stock price, which achieved a high of US$90.75 per share in mid-2000, plummeted to less than $1 by the end of November 2001. Chief Financial Officer Andrew Fastow and other executives misled Enron's board of directors and audit committee on high-risk accounting practices and pressured Arthur Andersen to ignore the issues. Several years later, when Jeffrey Skilling was hired, Lay developed a staff of executives that – by the use of accounting loopholes, the misuse of mark-to-market accounting, special purpose entities, and poor financial reporting – were able to hide billions of dollars in debt from failed deals and projects. : 61Įnron was formed in 1985 by Kenneth Lay after merging Houston Natural Gas and InterNorth. ![]() history at that time, Enron was cited as the biggest audit failure. In addition to being the largest bankruptcy reorganization in U.S. ![]() Upon being publicized in October 2001, the company declared bankruptcy and its accounting firm, Arthur Andersen – then one of the five largest audit and accountancy partnerships in the world – was effectively dissolved. The Enron scandal was an accounting scandal involving Enron Corporation, an American energy company based in Houston, Texas. 2001 accounting scandal of American energy company Enron ![]()
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