Enron is a poster child for shareholder wealth destruction and bad behavior. This case describes the company’s strategy, internal and external governance to allow students to understand why the company failed. The case raises several interesting questions. What was the role of the accounting improprieties in Enron’s failure? What roles were played by strategic failures, the company’s culture and internal governance? Why did the firm’s auditors and board fail to foresee the problems at the company in time to save it?
Assigned Case Questions: 1. Why was Enron such an admired company prior to 2000? 2. Why did the company fail? 3. Why were the company’s internal checks and balances and incentive systems unable to prevent its demise? 4. Why did the external auditors and board fail to prevent Enron’s failure?
