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There is something terribly rotten with American business right now, and it is making many sick. All the new-economy lying and cheating that went on back in the ''90s has come back to bite everyone in the you-know-what. Even as Wall Street gazes hopefully at signs of a recovery, the market is ruthlessly separating the haves from the have-nots. Obviously, the trigger event here was the Enron scandal. Enron may have been a rogue operation, but its collapse has forced us to shine a halogen light on the books of America’s public companies, and what everyone is seeing sure is not pretty. In the last couple of days of January alone, stocks of Tyco, Cendant, Williams Cos., PNC, Elan, and Anadarko were brutally punished for alleged or acknowledged accounting problems.
Unless a serious effort is made to make those statements clearer, there is little chance of restoring shareholder confidence. Doing so will be particularly tricky today, when the complexity of business is increasingly turning accounting into an art of estimation and judgment. To make those judgments credible, auditors and managers need to work hard to restore faith in their basic integrity. In the meantime, better rules would certainly help. Five ways to avoid more Enrons are: 1. List the risks and assumptions built into the numbers. 2. Standardize operating income. 3. Provide aid in figuring free-cash flow. 4. Highlight the things that matter. 5. Bring hidden liabilities back onto the balance sheet.
Companies should expect pressure from shareholders to disclose more information about the structure and composition of their boards over the next few months as a result of Enron Corp. Government regulators'' rising interest in corporate governance-related reforms may be one of the few positive developments to come out of Enron''s financial debacle for investors
Due to the Asian financial crisis from mid-1998 a series of severe financial difficulties have hit enterprises in Taiwan. It created severe impact on Taiwan''s economy. The reason may be a weak implementation by enterprises of their internal control system or flawed corporate governance. Thus, this research was made to find the cause of the Enron scandal , and to suggest what can be done to prevent these kind of thing happened in Taiwan.
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