The Enron Scandal was an accounting scandal involving the Enron Corporation. Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. Enron's predecessor was the Northern Natural Gas Company, established in 1932 in Omaha, Nebraska. It was reorganized in 1979 as the primary subsidiary of a holding company, Inter-North, which was a diversified energy and energy-related products company. In 1985, it bought the smaller and less diversified Houston Natural Gas. The company was initially named "HNGInter-North Inc.", but was later renamed Enron. Enron's business segment Enron was originally involved in the transportation and distribution of electricity and natural gas throughout the United States. The company has developed, constructed and operated legally compliant power plants and pipelines and other infrastructure around the world. Enron owned a vast network of gas pipelines, stretching from coast to coast and border to border. Say no to plagiarism. Get a custom essay on “Why Violent Video Games Should Not Be Banned”?Get the original essayWhat made it a scandal?In the 1990s, corporate self-regulation in the United States d America was widely seen as having reached a high plateau of evolution. success thanks to the proliferation of good practices and sophisticated institutional monitoring. As Enron became the largest seller of natural gas in North America in 1992, its trading of gas contracts brought in $122 million (before interest and taxes), the second largest contributor to the company's net income. However, Enron's bankruptcy shook the entire system. Some of the highlights brought about by the revelation of this scandal were: $30 million in internal transactions by the CFO; $700 million in net profits disappeared; $1.2 billion in equity is gone; more than 4 billion dollars. in hidden liabilities. Many of Enron's recorded assets and profits were inflated, if not completely fraudulent and nonexistent. Debts and losses were placed in "offshore" incorporated entities that were not included in the company's financial statements, and other sophisticated and obscure financial transactions between Enron and its related companies were used to eliminate unprofitable entities from the company's books. By the fall of 2000, Enron was beginning to collapse under its own success. CEO Jeffrey Skilling hides financial losses from the company's business and other operations using mark-to-market accounting. This technique measures the value of a security based on its current market value rather than its book value. Therefore, this could be potentially disastrous for companies that do not trade in actual securities. For Enron, these accounting practices help them deceive investors and other stakeholders. The company would create an asset such as a power plant and immediately record the expected profit on its books. Therefore, even if the project or asset became unprofitable, its projected profits would make it appear successful. Similar fraudulent accounting activities were undertaken by the company to appear more profitable than they actually were. Keep in mind: this is just a sample. Get a personalized article from our expert writers now. Get a Custom Essay The End By the summer of 2001, Enron was in free fall. CEO Kenneth Lay retired in.