Jan Christopher D.

Decoro FM 12 (1:30-3:30)
BSA-4 July 5, 2019

Movie Title: Enron: The Smartest Guys in the Room

Enron: The Smartest Guys in the Room discusses one of the biggest turmoils/scandals in
the history of US corporate state. There are a lot of irregularities that the said scandal brings its
audience- from the internal structure and management of the company to the external
transactions and events of Enron. Once a powerhouse, now a rubble. Everything that happened
with Enron resonates with the whole world’s corporate state. This is what happens to a company
built with anomalies, distrust and deceit.

Movie relation to course and current subject:

The movie may seem irrelevant to a huge number of individuals nowadays. Enron scandal
was one of the greatest corporate disasters in history. It involves every structure of the company
which has been maligned by the executives who gained personal wealth and power at the
expense of the investors and employees. These executives left nothing to their subordinates. And
this resonates to a lot of ethical issues in the world of investment; and even in other businesses.
But looking and analyzing critically, it has lot to say and imply about our current commercial and
investing situation- not only in the US-grounds but perhaps even in the Philippine setting.
Personally, speaking as an accountancy student, the movie relates much to my future line
of work- auditing, financial analyses, and other related activities. It is with genuine trust and belief
that an accountant should perform his/her work at the best of his/her abilities- acknowledging the
real needs of employees and investors. It is a must that personal wealth should be offset from the
real goal of an accountant and a company- to help achieve value maximization and utilization of
any company in an effective and efficient way. The movie opens doors to the reality that anything
can happen in the business world- be it good or bad. And there should always be contingency
plans for compromise or otherwise. Everything should be scrutinized and wholly organized prior
any company’s undertaking to avoid conflicts. Hence, accountability should be top priority too. If
something is somewhat unlikely with regards to the company’s vision, mission and ideals,
something must be done. Everything should be structured in a way that the company can have a
“smooth sailing” operation of activities and transactions. Thus, as a student, I have to be always
reminded of these things and try to apply every facet of knowledge I have gained and will gain in
my long business journey.
As to subject, we are taught of proper management of capital markets. This involves every
financial stocks and other related marketing strategies and information. In relation to this, the
movie entices its audience on the conflict of these said subjects. There was irregularity in the
management of stocks. There were offset values from the real ones. There were mismanagement
of roles and duties among individuals within the company. These were just some of the many
conflicts that were very evident in the scandal. And these can all be avoided through some of the
knowledge regarding the subject of capital markets. It will all boil down to legitimate structure and
direction of executives to their respective subordinates. If communication is present and
resounding, everything will definitely follow- from sound management to efficient executions.
Movie Issues:
Many things were wrong with Enron and, after its demise, many people were willing to
explain them. But the proximate cause of Enron’s failure was a series of illegitimate financial
transactions involving what accountants and investment bankers call structured financings.
Sugarcoating the real state (lack) of stock’s value
Management should always be on top of your trust list when you ought to invest in
something that you want to prosper and have fruition in the near future. But what happened in the
Enron scandal is unethical. There was a deception between investors and the company itself.
Company debt evasion
One of the many questions that people wanted answers with was: Where did Enron hide
all its debts? This became a constant argument to people involved with the company. And its
executives were held liable with these proved allegations. Many have invested and opted in. But
what blinded them was the real idea of the executives to deceive them with the truth. Thus, using
them for their own personal gain of power and wealth.
Company left its investors and employees defenseless
The board of directors was not attentive to the nature of the off-books entities created by
Enron, nor to their own obligations to monitor those entities once they were approved. The board
did not pay attention to the employees because most directors in the United States do not consider
this their responsibility. They consider themselves representatives of the shareholders only, and
not of the employees. However, in this case they did not even represent the shareholders well-
and particularly not the employees who were shareholders.

US Government’s remedy in problem resolution:

It is in fact that Enron scandal is the most significant corporate collapse and downfall in
the United States since the failure of many savings and loan banks during the 1980s. This scandal
calls for the need for significant reforms in accounting and corporate governance in the country,
as well as for a close look at the ethical quality of the culture of business generally and of business
corporations in the US. In the new economy, new kinds of companies have been created. The
new economy has lost some of its appeal after the collapse of many companies and of Enron.
Accounting firms are already moving to sever their consulting businesses. The SEC should
probably adopt additional disclosure requirements. Various regulators should tighten
requirements for directors to be vigilant and provide protections for whistleblowers who bring
improper behavior to public attention. But, in the final analysis, the solution to an Enron-type
scandal lies in the attentiveness of directors and in the truthfulness and integrity of executives.
Clever individuals will always find ways to conceal information or to engage in fraud. The US
government has tightened securities regarding investment and the likes. They have grown
conscious of all possible crisis that may happen to the commercial world.
Bottomline, the Enron scandal will be a basis of “what should not be done” and “what
should not happen” to any company. There are many available resources that can be used in lieu
of Enron that will help any company to prosper and develop with compromise. Hence,
accountability always play.