Names:______

Part 1: Complete this worksheet: 10 pts

Part 2: Summarize the Enron scandal in a PPT: 40 pts

·  Intro Slide

·  Slides 2 – 4 list and describe the roles of Auditors, Board of Directors, Investment Banks, Credit Rating Agencies, Lawyers

o  http://www.pbs.org/wgbh/pages/frontline/shows/regulation/watchdogs/

·  Slides 5 – 9 Key players in the Enron-Andersen Scandal: profile any 5

o  http://www.pbs.org/newshour/bb/business/enron/players.html

·  Slide 10: What is Sarbanes-Oxley? History and describe.

·  Slide 11: Each member writes two- complete sentences on what they learned about this case.

·  Slide 12: Find a video about the verdicts/impact of this case and insert it as an action button (hyperlink to ppt)

What was and is still being done to prevent future Enron/Andersen Scandals?

The astonishingly rapid failure of Enron -- at one point the nation's seventh largest company -- has led many to ask the question: Where were the watchdogs? The Securities and Exchange Commission (SEC) is charged with overseeing U.S. capital markets and is conducting an investigation into Enron's collapse, as is Congress. Both are re-examining the roles of corporate watchdogs, including corporate boards of directors, auditors, investment banks, credit rating agencies and lawyers.

Some critics see the case of Enron as a consummate example of "crony capitalism," in which the ties between the company's executives and its auditors, bankers, and board were so close that no one was keeping score on Enron's aggressive accounting strategies. Others argue that corporate America has a good system of checks and balances and that Enron was a "perfect storm," a unique situation in which all the varied elements of good corporate governance and oversight failed for one reason or another.

Fifty percent of American households support corporations by buying stock. But the level of trust people have placed in the corporate world by making these investments has not been reciprocated by reliable information about the financial performance and the actual financial condition of the corporation. Both individual and professional investors are becoming more cautious, with many reducing or withdrawing their investments.

If only there were a simple checklist of indicators, like the following, that would give a signal that something is amiss: http://www.pbs.org/wgbh/pages/frontline/shows/regulation/etc/questions.html

2. 

12. 

o  Source: http://www.pbs.org/wgbh/pages/frontline/shows/regulation/watchdogs/

Auditors: What is their responsibility?

Boards of Directors: What are their responsibilities?

Investment Banks: What are their responsibilities?

Credit Rating Agencies: What are their responsibilities?

Lawyers: What are their responsibilities?