Good Example Of The Following Part Of External And Internal Corporate Governance Resulted To The Failure Of Enron Case Study

The internal aspect of governance that saw Enron fail can be attributes to the SEs design. In this case the system would make low profit margin inaccessible. They would also allow for writing off assets which the company saw as bad. The blame of revenue gain resulting from this design can thus be attributed to top management ineffectiveness. In regard to external governance, there was failure in identification of signs that would be attributed to such cases of mismanagement. Similarly, responsible auditors as well as the legal counsel failed in their work. They were biased in addressing discrepancies and errors in Enron. They could have done this to ensure their continued working relationship with Enron. This would ensure their companies benefited. However, these professionals are not accountable for Enron practices.
How stakeholders would have acted in the case of Enron to ensure that problems were resolved before they reached critical stages

Auditors

The auditors would have ensured proper audit and reporting to ensure that errors and discrepancies were resolved. Instead they protected the interest of their companies to ensure continued relationship. Arthur would have instead reported real opinions of what their audits found out instead of being biased to please Enron.

Equity markets

These markets would have been keen to track Enron. In this case major signs of misbehavior would have come to light before they reached critical stages.

Legal Counsel

The companies which are identified as Vinson and Elkins did not advice Enron well. They needed to provide the company with the consequences of its unlawful actions. They also failed to predict crumbling, and warn the management.

Regulators

Clearly there was an identified lack of necessary regulation of the energy company. To prevent such cases, the regulators ought to have to been keen and ensure that Enron meet all guidelines and requirements to conduct business.
#Question 3

If firms had similar system as Enron, people would take this as an isolated case and not future failures.

If this was the case, several people would believe this case was an isolated occurrence. This can be explained by the fact that top leadership proved to have unethical behavior in regard to thecompany business operations. This is seen in the way they engaged in illegal actions with the aim of hiding their dismal performance.