Books on Enron 1407

  • Hi everyone,
    Any good recommendations on which book I should read to understand why the SOX act was passed?
    [1] The smartest guys in the room
    [2] Enron - Rise and Fall
    [3] Conspiracy of Fools

  • I’ve heard #1 is pretty good. Additionally, you might check out resources available from the SEC website, ‘FINAL REPORT OF THE ADVISORY COMMITTEE ON SMALLER PUBLIC COMPANIES TO THE U.S. SECURITIES AND EXCHANGE COMMISSION’.
    The document focuses on the need to reassess SOX requirements imposed on smaller issuers. However, the document contains a lot of good information about the intent of SOX as it applies to all companies, the position of Congress and various groups, etc.
    In short, the document is a good read for anyone who is interested in understanding and implementing SOX, with particular emphasis on professionals working for smaller organizations.
    Also, many of the questions posted in this Forum for feedback and reply from the SOX community are either directly or indirectly discussed in the document.
    Hope this helps,

  • Also good is Pipe Dreams.
    However, you need to bear in mind that Enron is not THE reason the SOx Act was passed. It was one of several high profile cases (incl. WorldCom, Tyco, etc.) which showed quite starkly that corporate goverenance in the US was not everything it should be.

  • It seems that anyone and everyone may have a view for the reason(s) that led to the enactment of SOX. However, no one can dispute that after SOX was enacted, the accounting profession has not changed in some way–for better or for worse.%0AIn recent news…%0ANortel Networks Corp to Restate Previusly Issued Financial Statement…%0APosts USD2.21 Billion Quarterly Loss%0ANortel Networks Corp. said it needs to restate past financial statements again after uncovering more accounting mistakes, as the telecom gear maker struggles to get its accounting woes behind it.%0AThe Brampton, Ontario, company also reported Friday a USD2.21 billion loss for its fourth quarter, weighed down by a legal settlement, and said it would delay filing its annual report for 2005 until next month.%0ALast year, Nortel finished the protracted process of restating its financial results for past years as a result of the accounting scandal that erupted at the company in 2004 and led to the firing of senior management. %0ANow, Nortel said it has to restate financial results for 2003, 2004 and the first nine months of 2005, as well as make adjustments to periods before 2003. Nortel said it recently discovered that revenue from some contracts had been improperly recognized.%0AShares of Nortel, which is being investigated by U.S. and Canadian regulators, fell 10 cents, or 3% to USD2.99 on the New York Stock Exchange.%0A’Although the need to restate certain financial statements is unfortunate, it’s the right thing to do. This revenue is real – it was recognized in the wrong periods,’ said Nortel President and Chief Executive Mike Zafirovski in a press release. ‘The restatements do not affect the company’s cash position.’

  • And something to keep accountants busy for a while.

  • This ties into the good point Denis made. While, Enron was among the worst of the violators, ‘creative’ financial accounting was prevelant beyond just Enron alone 😞
    Congress was responding to the anger felt when many investors lost a fortune in the stock market. Internet stock valuations fell sharply between 2000 and 2002. Also, some employees in the affected companies lost their entire retirement pensions and savings in stock holdings.
    I also found this information on why SOX regulations were created:
    Why Congress thought the Act was needed – The US Sarbanes-Oxley Act was passed in the wake of a myriad of corporate scandals. What these scandals had in common was skewed reporting of selected financial transactions.
    For instance, companies such as Enron, WorldCom and Tyco covered up or misrepresented a variety of questionable transactions, resulting in huge losses to stakeholders and a crisis in investor confidence.
    How did Congress think the Act would address the problem? Sarbanes-Oxley aims to enhance corporate governance and strengthen corporate accountability. It does that by:

    1. formalizing and strengthening internal checks and balances within corporations
    2. instituting various new levels of control and sign-off designed to
      ensure that financial reporting exercises full disclosure
    3. corporate governance is transacted with full transparency

  • Thanks everyone - appreciate the feedback. The other book I thought was interesting is
    The rise of the rogue executives: How good companies go bad and how to stop the destruction by Leonard R Sayles.
    Any review or comments will be appreciated.

  • Hey Erika - You can now purchase the movie version of The Smartest Guys in the Room which was up for an Oscar. The Eichenwald book is probably what I would read after watching the movie.
    There are a few conferences with Eichenwald speaking - just do a google.
    Good luck.

  • [quote=‘Erika’]Hi everyone,
    Any good recommendations on which book I should read to understand why the SOX act was passed?
    Does anyone have any report on how much of this SOX treasure is shared between the BIG four( in terms of both audit and independent consultancy)???
    plz share it guyz…

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