Please watch the following documentary: The Smartest guys in the room
Please watch the following documentary: The Smartest guys in the room -http://watchdocumentaries.com/enron-the-smartest-guys-in-the-room/
(Links to an external site.)
After watching the documentary, please answer the following questions in a 2-3 page essay: One of the many reasons Enron collapsed was the use of a creative Accounting system called Mark-to-Market Accounting system that allowed companies to report future earnings in their current financial statements. In other words, they were able to report, to their investors, profits today based on projected earnings in the future. Moreover, Enron’s CFO was able to create outside fictitious businesses tied to Enron that were used to hide Enron’s debt. From a legal point of view, why were these practices unethical and how did it affect Enron’s investors in general?
