MGMT 1005H Lecture Notes - Lecture 7: Toxic Asset, Andrew Fastow, Sherron Watkins
Document Summary
Constant pressure to be the best, if you can do it, do it , wanted to stay relevant, constant need for improvement, create large domain of enron. Initially upper level and company got major raises and compensation and no one was hurt, but after a while, company collapsed and employees and stockholders got hurt, did not maximize utility in long run. No, they were not transparent with their filings, money spending, and how they were categorizing their expenses. All the extra money and benefits were mostly distributed to the upper level management, not base line employees. Only connected is the trust they put in the faulty accounting practices. No one was paying attention to the long term consequences. Enron put on a confident exterior because they believed it. Auditing was done by a close partner, arthur andersen, who reported things as enron wanted.
