enron scandal
The Enron scandal, which unfolded in the early 2000s, involved the American energy company Enron Corporation, which was found to have engaged in widespread accounting fraud. Executives used complex financial practices to hide debt and inflate profits, misleading investors and regulators about the company's true financial health. When the truth emerged, Enron filed for bankruptcy, leading to thousands of job losses and significant financial losses for shareholders. The scandal prompted major reforms in corporate governance and accounting practices, including the Sarbanes-Oxley Act, aimed at increasing transparency and accountability in financial reporting.
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The Enron scandal was a major corporate fraud case that emerged in the early 2000s involving the American energy company Enron Corporation. Executives used accounting loopholes and deceptive practices to hide billions in debt and inflate profits, misleading investors and employees. When the truth surfaced in 2001, Enron declared bankruptcy, leading to significant financial losses for shareholders and employees, and the collapse of the accounting firm Arthur Andersen. The scandal prompted reforms in financial regulations and corporate governance to enhance transparency and accountability in business practices.