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Enron Corporation New Century Financial Corporation

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Please discuss all cases to date that you've done for me.

This discussion should center on similarities and differences that exist among the cases, what has been done to strengthen the audit function since the cases occurred, and what has not been (or cannot be) done to reduce the likelihood that the situations that occurred in the cases occur again.

Cases's Title

1-1 Enron Corporation
1-11 New Century Financial Corporation
1-4 Health Management, Inc
1-6 NextCard, Inc
1-7 Lincoln Savings and Loan Association
1-12 Madoff Securities
3.3 United Way of American
7-1 Ligand Pharmaceuticals
Tata Finance Limited
Gazprom
WorldCom

Do what you can do. Make it simple like a summarize by answering the questions asking. Thank you

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Solution Summary

The expert examines Enron Corporation for the new century financial corporation. The response addresses the query posted in 1344 words with APA references.

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The response addresses the query posted in 1344 words with APA references

Corporate fraud and scandals can be understood as one of the core and critical issues in context of global financial industry. There can be different critical issues and frauds that have affected the credibility of this business sector. In this regard, this section discusses the various corporate scandals held in the past. It also explores the reasons for such accounting failures which are mainly responsible for the corporate scandals. The similarities and differences among the various cases has also been discussed.

Enron Corporation: Unethical and fraudulent financial reporting practices were adopted by Enron to misrepresent the earnings and alter the balance sheet to show favorable financial performance in order to attract the investors to invest more in the company. Embezzlement of funds by the executives of the company resulted in the bankruptcy of the company and dissolution of the accounting firm, which audited financial statements of the company (Knapp, 2010).

New Century Financial Corporation: The financial statements contained false and misleading information and some omissions with regard to its subprime mortgage business. The company made disclosures in the financial statements to express that home mortgage loans to individuals are being provided even under the circumstances in which they would not qualify as per standards prescribed by the conventional lenders. The financial position of the company was portrayed as the company is earning more than the competitors (Knapp, 2010).

Worldcom: The company's top management manipulated figures in financial statements and showed increased profits by inflating revenues and capitalizing the line cost, which was required to be expended in the income statement. The fraud was discovered during internal auditing by the company's own internal audit department (Knapp, 2010).

Tata Finance Limited: The value of company's investments declined suddenly causing huge losses and financial crisis in the company. These investments were not approved by the board of directors of the company. The company breached Reserve bank of India guidelines with regard to maintaining adequate capital ratio several times in the circumstances of financial crisis, which eventually led the company to bankruptcy (Knapp, 2010).

Madoff Securities: The Company was incurring heavy losses, but it continued to distributing the dividend to ...

Solution provided by:
Ashish Sharma, MBA (IP)
Education
  • MBA (IP), International Center for Internationa Business
  • BBA, University of Rajasthan
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