REGULATION, COMPLIANCE AND GOVERNANCE Essay Example | Topics and Well Written Essays - 2000 words - 1

REGULATION, COMPLIANCE AND organisation - Essay ExampleThe essay highlights on similarities and dissimilarities between the failures of Enron and Northern bank. Regulations that argon introduced for addressing such corporate failures argon also discussed.Enron Corporation was an esteemed energy provider company, which had its headquarters in Houston, Texas. Prior to the period of celestial latitude 2001, Enron had enjoyed a prosperous position in the United States (US) and achieved the seventh position for being the most advanced firm ope valuation worldwide. The main problem for Enron had surfaced from wrong and questionable practices followed therein. The company desired to expand its ground and operations through diversification of the products as well as introduction of online trading. Nevertheless, following its success, Enron breached the usual practices that are prevalent in the industry. Instead of acting as a broker between the sellers and buyers, the company traded in pr oducts and gas. This fact indicated that purchasers bought the products and gas from Enron directly, whereas the last mentioned bought the same directly from suppliers (The economist Newspaper Limited, 2014). Hence, it can be verbalize that continuity of business operations was solely dependent on proper credit rating. Eventually, when the credit rating of Enron dropped drastically, the sellers and buyers stopped the trade. The board of Enron had devised a very risky strategy, which could not be undertaken by the security of the company, habituated that there was a drastic slump in credit rating and consequently, in the trade (The Economist Newspaper Limited, 2014).Enron had devised another strategy by appointing Special Purpose Entities (SPEs), which were basically a third caller who collected investment funds from companies and people. Even though these entities were not directly related to Enron, yet the latter was the guarantor of payment for the borrowed funds. This proces s was executed by offering shares to the investors. It was observed