Introduction to the Enron Scandal

The financial scandal surrounding Enron is one of the most notable in recent US business history, and was, at the time, the largest bankruptcy ever. Enron was led by a group of unsavory businesspersons, namely Jeff Skilling (CEO), Andrew Fastow (CFO), and Rick Causey (CAO) who received favorable and negligent treatment by auditors of Arthur Anderson, the company’s independent auditor. Enron’s leaders primarily took advantage of rules-based accounting standards relating to revenue recognition of contracts and the concealing of debt through off-balance sheet financing vehicles. These topics are discussed in depth herein, as the ‘how’ of Enron’s collapse is unveiled.