Management

TABLE OF CONTENT

1) Introduction……………………………………………………………………….2

2) Chapter 1

1.1 Research question & objective………………………………..2

1.2 Literature Review…………………………………………………….3

1.3 Research design & methodology……………………………..6

3) Chapter 2

2.1 Shareholder wealth maximization……………………………….6

2.2 Measures of shareholder value…………………………………….7

2.3 Shareholder value creation model……………………………….7

2.4 CSR and shareholder wealth………………………………………..9

4) Chapter 3

3.1 Financial Reporting………………………………………………………9

3.2 Disclosure of financial data & market plunge/risk……….9

3.3 Financial reporting & shareholder price……………………….10

3.4 Enron’s Financial reporting…………………………………………..11

3.4.1) Background…………………………………………………………11

3.4.2) Enron’s Trading Model………………………………………..11

3.4.3) Financial Reporting & Enron……………………………….12

3.4.4) Enron’s Shareholder Price…………………………………..13

5) Chapter 4

4.1 Financial Reporting Future & suggestions…………………..15

4.2 Conclusion……………………………………………………………………16

4.3 References……………………………………………………………………16

FINANCIAL REPORTING & FINANCIA FAILURE OF INVESTERS/ACCOUNTING FRAUDS IN COMPANIES

INTRODUCTION

Business practices have mostly been linked with fraud and have mostly been influenced by financial breakdowns. The latest accounting scandals such as Enron, WorldCom, Parmalat, Tyco etc. have cause damage of not only billions of $ to the stakeholders but along with that it also have harmed the profession of accounting.

Enron is one of the biggest bankruptcies in the corporate history of United States. It grew as one of ten biggest US organizations in a very short time. Its stock rate increased to $83.3 in 2001 and Enron’s market capitalization surpassed $60B, but its success was built on increased earnings and deceptive accounting practices. The powerful downfall of Enron has trembled the investor’s confidence.

This research...