[.ca] What Went Wrong at Enron: Everyone's Guide to the ... (ISBN 0471265748)

What went wrong at Enron:
The book was thrown together. The author wanted to be a first mover in the marketplace that analyzed what went wrong at Enron. However, the author neglected to mention in detail and explain how off balance sheet special purpose entities were Enron's demise. This is a waste of time and money to read.

Thin:
Let's start with the positives: - the book is easy to read and reasonably well written; - the basic facts of the story are covered; - the book starts the story way back before the problems emerged so that you get a feel for what the business was up to. But - it is very short book for such a complex subject - the "unravelling" - the investigations into "what went wrong" are (ironically) not well covered - there is almost no coverage of the Andersen issues So save your dollar, pound, euro or yen - don't waste it on this book.

Lacks specifics, too many pointless analogies.:
Enron's greed and financial scandals, along with the rise and fall, are interesting in itself. This book, though it does explain the fall and is easily readable, isn't intriguing enough to capture the reader's attention. In fact, more than half is a description of how Enron came to be and what there business model is. A chunk of the book is just photocopied evidence pasted in the appendix. Only a minute section describes the scandal and accounting frauds. The author loves anologies. He devotes pages to baseball card trading, and then sort of compares it to Enron's business. While these analogies help with understanding the business model, it's often over-simplified with a glaring lack of details. What I found was a lack of hard numbers and statistics which meant I couldn't put the failings into perspective. Also, the first half of the book where he details Enron, he seems to be praising their business, then hand wavingly, he points to a few corrupted examples. It almost appears that the author thinks Enron would still be a powerhouse if it wasn't for a few specific incidents. As a book, it gets the job done. It shows the errors of Enron in a way that any non financial person could understand. It does tend to oversimplify, and it's glaring lack of numbers and details hurt it in the end.

Enron-eous:
Deregulation of the natural gas markets in the 1980's introduced uncertainty and volatility to energy prices. Gas producers and consumers sought ways to hedge unpredictable costs and variable supply. Enron's contribution was to develop customized contracts that met the needs of the market, broker the deals as an intermediary, or act as a party to the contract. Offering the contracts on the internet was another innovative plus for what had been a sleepy Houston utility. Not by chance, CEO Ken Lay was an economist and student of market dynamics. If the strategy made money in the gas industry, why not expand it to other areas in need of a market maker to control risk. Authors Fusaro and Miller see a company mesmerized with its ability to to be that key market maker in an expanding range of areas that would include water supply, pollution credits, weather-related risks, etc. And why not export the strategy to other countries. So, Fusaro and Miller see hubris at work, a company arrogantly moving beyond its core competency in energy matters. For them it is primarily a market story. There are some brief observations about Enron's hothouse work culture and morality in the markets. But in the end, the authors' view of Enron is that of a company that created a market and was crushed by it. Debt, competition, inadequate planning, and the loss of investor confidence brought them to bankruptcy helped by a few, dubious 'special purpose entity' (SPE) deals. They may be right. But what will occupy the courts for years will be the less abstract tales of greed, fraud, and dereliction of duty. There is the sad failure of auditor Arthur Andersen to function in its role as, well, auditor. Also: I can find no comment on the board of directors (What they didn't do and why they didn't). WHAT WENT WRONG at ENRON is a less than complete picture of the matter, but it does provide a perspective that saves us from puzzling over Enron's explanations of its SPE's, the company's filings and footnotes that strangle meaning, and the ethical failings of desperate people.

A Shakespearean tragedy:
What really went wrong at Enron? A question that cannot be answered easily due to its nature of complexity. Thousands and hundreds investors, including Enron¡¦s employees who vested their retirement benefits in the s401k plan solely with Enron shares¡K..The horrible downfall alarmed the investment community, hurt the professional society (accountant, lawyer, underwriter etc.) and credibility of the monitoring commission¡K. The U.S. government reacted with the new legislation (Sabanes-Oxley Act) as an ¡§attempt¡¨ to tackle the problem, trying to put the company¡¦s management back on track to shoulder its fiduciary duty to the company¡¦s shareholder. But, does it work? The extent to which the various parties¡¦ responsibilities is still clouded. If we do not really analyze the root causes which led to the Enron¡¦s downfall, we never know the answer. This book, written with the targeted general audience, is published at the right time to give the public a good chance to find the ashes in the smoke. At least for the moment. According to this book, the tragedy was played by an arrogant CEO, greedy senior executive, loyal whistleblower, with the backdrop of a wrongly conceived free economy principle. The book is well written and gives insightful analyses based on the available evidence and traces. Some of the factors leading to the tragedy noted by the authors are: *"X The use of SPE (Special Purpose Vehicles) in accounting to keep off the accounting profits as well as to hide the potential liabilities *"X The constantly fearing environment built by the Corporate Culture emphasizing on a sense of urgency *"X Over-extension of operations in the deregulated energy and telecommunication market *"X Mark-to-market accounting principles *"X Less than full company¡¦s disclosure tendency *"X Valuation problem of customized contracts * Making commitment as a counter-party to every trade in arbitrage markets *"X Trading from natural gas to electricity to bandwidth to 1800 different products in the Enron online *"X Conflicting company¡¦s strategy: asset-lite vs. debt heavy financed investments *"X Manipulated earning estimated to meet expectations *"X Deals financed by high Enron¡¦s stock price *"X Excessive investment in optic fibre networks The list could go on and on. In fact, Enron went to the extent that deals were made just for the sake of making them. The more you read about the book, the more you feel it is a Shakespearean tragedy ¡V things are certain to get worse with all of these interrelated factors playing on stage. The general audience, those who believed that the play had a good ending, bought the tickets but found that the play was ultimately turn out to be a tragic one. They suffered. However, the director said: ¡§You bought the tickets because you believed in the play had a good ending. I didn¡¦t say that it would end in that way.¡¨ Refund? No. The investigation into Enron¡¦s alleged sham trading and potential fraud scheme is still in progress as of this writing¡K..I highly recommend the book to the general readers, although it is better if you are financially literate. It is a thought-provoking and interesting read, especially to the CPAs.