Financial Collapse The And Enron - 1320 Words

OneTel and Enron were huge technology companies, dominating the competition that they faced although - everything changed. Both of these companies operated in the same era, coincedently both suffering financial collapse. The reasons were mainly because of the failure to follow major accounting principles, lacking morals and lacking strong work ethics. If even a major corporation can fall into this â€Å"trap†, then avoiding doesn’t sound easy, although accountants can easily avoid scandals by following a precise set of given rules and ethics. OneTel and Enron are prime examples which demonstrate the danger when a business is faced with an accounting scandal - which in turn could have been avoided. The fall of major telecommunications company OneTel came as a huge shock, many fell victim to this. The fall of OneTel was caused by majorly flawed governance committee. â€Å"In the year 1999-2000 OneTel purchased over $520 million AUD on telecommunications licenses, ten times what corporate competitors Optus, Vodafone and Telstra spent in the past† (Barry, 2002). Here Barry explains the sheer magnitude of OneTel in it’s prime. Even though OneTel was positive by almost 700 million, the collapse was inevitable because of a majorly flawed governing circle. The post on Accounting Review shows that the flawed committee, which OneTel relied on was not adequate, â€Å"On 19 April 2001, the company’s cash balance dropped to A$25 million. On 16 May 2001, the two joint-CEOs Jodee Rich and BradShow MoreRelatedDetecting Financial Statement Fraud : The Collapse Of Enron Corporation2216 Words   |  9 PagesDetecting Financial Statement Fraud The dramatic collapse of Enron Corporation, following the series of disclosures of accounting improprieties, leads to questions regarding the soundness of accounting and financial reporting standards, and contributing factors to financial statement fraud. One question relates to important internal controls ignored in the creation of special purpose entities such as LJM1 by Enron. Another question relates to how Enron’s harsh Performance Review Committee mightRead MoreEnron : The Largest Energy Trader1669 Words   |  7 PagesEnron was the largest company for energy and natural gas made possible through the merging of Houston Natural Gas and InterNorth based in Omaha. The merger made Enron the largest energy trader in the country and the seventh largest in the world. 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