Enron was an American energy company that collapsed in 2001 due to fraudulent accounting practices. It is considered one of the major corporate scandals in history. To avoid a similar fate, it is important for companies to have strong internal controls, ethical leadership, and transparent financial reporting.
The Sarbanes-Oxley Act of 2002 was passed in response to the Enron scandal. This law created new regulations for publicly traded companies, including requirements for enhanced financial reporting, increased oversight of corporate governance, and whistleblower protection. Following these regulations can help companies avoid the risks that led to Enron’s downfall.
