Enron: Who was at fault?

Most people all over the world have heard that Enron, America 's leading energy company, "cooks" (Gupta, Weirich & Turner, 2013) his book and has brought investors billions of dollars of income and retirement . The controversy over the Fund Enron scandal focuses on investor losses, officials' unethical behavior and suspicious accounting strategies, but many others are confused. The question arises as to who is really failing and what has been done to make it never happen again.

According to Enron's lawsuit and official investigation, bankruptcy resulted in the unemployment of more than 6,100 Enron employees. In addition, it also brings serious mistakes to workers' health care and retirement savings as workers' 401K plans stop when workers' stock prices plunge. In addition, she pointed out that the 911 project brought a lot of benefits to Enron 's management team, not to provide profit to workers. In the 911 project Enron will pay a $ 105 million bonus to company executives before the bankruptcy application of the company in December 2001 (Steffy, 2005).

Agency theory has become popular and accepted in the United States and the UK, but errors are increasing. In the United States, Enron is the biggest bankruptcy in American history due to the collapse of Enron (Thomas · Clark, 2004), thousands of employees who lost lifelong savings are tied to stocks of energy companies It was. Enron's business is based on risk management. When Enron 's stock price fell, Enron protected the shares of Enron by supplementing funds. At the same time, due to the agency problem, Andrew Fasto (CEO) awards are still secret, and another CEO (Kennethley) is getting a lot of wealth from the company. According to agency theory, Enron can not balance between insiders and outsiders in the board of directors. Therefore, due to the asymmetry of the information system, the lack of agency theory covering several aspects is evident, the confrontation of the moral crisis organization is the root cause of Enron's failure.