What is the company pressure in ENRON that would increase the likelihood of fraudulent financial reporting? what is the external environmental factors in ENRON' s business environment that should be considered in assessing the risk of fraudulent financial reporting?
Question
Environmental, institutional, or individual pressures and opportune situations, which are present to some degree in all companies, motivate individuals and companies to engage in fraudulent financial reporting. Fraud prevention and detection require that pressures and opportunities be identified and evaluated in terms of the risks they pose to the company.
1. Briefly describe the company's back ground and the corporate scandals occurred in the chosen company.
2. Explain the company pressures that would increase the likelihood of fraudulent financial reporting.
3. Identify the corporate opportunities that make fraud easier to commit and detection less likely.
4. Identify the external environmental factors that should be considered in assessing the risk of fraudulent financial reporting for:
The company's industry
The company's business environment
5. In your opinion, what can top management do to reduce the possibility of fraudulent financial reporting?