What business was Enron engaged in?


 Answer the following questions:

1. Identify the individuals servings as the President, Chief Executive Officer, Chairman of the Board of Directors and Chief Financial Officer of Enron Corporation.

2. What business was Enron engaged in? How was Enron supposed to make money?

3., What financial instrument did Enron utilize to engage in its business? Explain what that instrument is.

4. What was the “mark to market” accounting treatment adopted by Enron? How did that work? How did that allow Enron to book profits? Were those profits real?

5. What was Arthur Anderson and what role did it play in the Enron collapse?

6. How did the executives at Enron make most of their compensation? What device was utilized? On what did the amount of money earned by the Enron executives depend?

7. What device did Enron employ to hide losses and its debt? Why was it important to hide the losses Enron was sustaining? Who created the scheme to hide the losses?

8. What was Enron’s role in the California electric market? How and why did Enron manipulate the California electric market?

9. The documentary Enron was made in 2005. Research and update what has happened to the individuals identified in answer 1 since the documentary was made. Where are those individuals today and what are they doing?

10. Do you see any parallels to the recent financial crisis? Explain?

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