1. Enron: An Extended Case Study
Jim Rothwell
Assistant Professor of Accounting
Hickingbotham School of Business Ouachita Baptist University

2. The Crooked E: Coincidence or Prophecy ?
JAMES NIELSEN/AFP

3. Questions ? What happened within the company?
What was the corporate environment and culture of the company?
Who were the major players and their roles?
What “red flags” were there for analysts, auditors, and others to observe?
What accounting and auditing issues arose within the company?
How did the Enron scandal impact the accounting profession?
What did we learn from Enron?

4. Activities View the movie “The Smartest Guys in the Room.”
View the movie “The Crooked E: The Unshredded Truth about Enron.”
Read the book “The Smartest Guys in the Room.”
Read the book “Anatomy of Greed.”
Research the financial statements of Enron from
Create a timeline of the major events related to Enron from
Create a list of the major players and their roles in the Enron scandal and collapse.
Identify the “red flags” of fraud that were evident within the Enron organization, culture, structure, and environment.

5. Enron Portfolio Major events timeline List of major players and roles
Financial statement analysis and summary
“Red Flags” paper
Impact on the accounting profession paper
Role of Arthur Andersen
“What Did We Learn?” paper (personal reflection)
Enron Quiz Questions

6. Accounting and Auditing Issues and Concepts (Cont.)
Mark-to market
SPEs (off-balance sheet financing)
Impact on the profession
Government intervention

7. Accounting and Auditing Issues and Concepts (Cont.)
Impact on the profession
Collapse of Arthur Andersen
Sarbanes- Oxley
PCAOB
Ethics
Accounting firm
Client
Legal Liability
Social Responsibility
Evidence and documentation

8. Accounting and Auditing Issues and Concepts (Cont.)
Social Responsibility
Evidence and documentation
Audit Planning
Understanding the client – corporate culture
Understanding the industry/market
Risk assessment
Fraud risk factors
Internal Control
Reporting Issues

9. Current Status Enron Arthur Andersen Legal issues and court cases
Former executives
Employees
Arthur Andersen

10. Resources “The Smartest Guys in the Room” – DVD (video)
The Smartest Guys in the Room: The Amazing Rise and the Scandalous Fall of Enron– Book (McLean and Elkind)
“The Crooked E: The Unshredded Truth about Enron” – DVD (video)
Anatomy of Greed – Book (Cruver)
SAS 99: Consideration of Fraud in a Financial Statement Audit
Other articles, presentations, literature, etc.