Submitted by: Submitted by surbhiparekh
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Category: Business and Industry
Date Submitted: 02/25/2012 07:56 AM
ENRON: QUESTIONABLE ACCOUNTING LEADS
TO COLLAPSE
[pic]
By
Surbhi Parekh
S.Y.B
2105
Facts with a brief timeline
1985
Houston Natural Gas merges with InterNorth, a natural gas company based in Omaha, Neb., to form the modern-day Enron, an interstate and intrastate natural gas pipeline company with 37,000 miles of pipe.
1989
Enron begins trading natural gas commodities. Over the years, the company becomes the largest natural gas merchant in North America and eventually branches out into trading of other commodities, from water to coal to steel.
2000
Aug. 23 - Enron stock hits a record high of $90 a share.
Dec. 13 - Enron announces that president and chief operating officer Jeff Skilling, the driving force behind Enron's transformation from pipeline company to trading powerhouse, will take over as chief executive in February. Ken Lay will remain as chairman.
2001
Aug. 14 - Skilling resigns after running the company for just six months, citing the need to spend more time with his family but acknowledging sagging stock prices. To the relief of most employees, Lay named CEO again.
Aug. 22 - Enron Vice President Sherron Watkins meets with Lay to discuss memo she wrote about looming accounting problems.
Oct. 16 - Enron reports a $638 million third-quarter loss and discloses a $1.2 billion reduction in shareholder equity, partly related to partnerships run by chief financial officer Andrew Fastow.
Oct. 22 - Enron acknowledges Securities and Exchange Commission inquiry into a possible conflict of interest related to the company's dealings with the partnerships.
Oct. 23 - Lay professes support for Fastow during conference call with analysts.
Oct. 31 - Enron announces the SEC inquiry has been upgraded to a formal investigation.
Nov. 8 - Enron files documents with SEC revising its financial statements for past five years to account for $586 million in losses.
Nov. 19 - Enron restates its third-quarter earnings and discloses it is...