As the economy spirals downward on the heels of an unprecedented surge in the United States economy, consumers, whom collectively have made billions in the stock market, are now faced with major economic concerns. These concerns may include total loss of their retirement income and the loss of their jobs. This is only part of what is facing the U.S. economy today. New corporate bankruptcy filings are becoming the status quo in the daily news and thousands of individuals are being laid off from companies which are considered "Blue Chip" stock investments. There is a lot of finger pointing at what is considered the root cause of this economic debacle. These accusations blaze a path directly toward the accounting practices taking place in the corporate world today. "What is happening with corporate America?", "What are the latest scandals of Cooking the Books?", and "How is it impacting the economy?" are repeatedly asked questions.
The first of the most highly publicized events of corporate fraud in accounting practices is that of Enron, and this scandal probably elevated the coined term "Cooking the Books." The Enron case was the first of many corporate accounting scandals that impacted millions of people. It caused the demise of one of the largest companies in the U.S., and was considered, right up to the point of its financial ruin, a good investment. Enron evolved out of the deregulation of the energy markets and became the largest player in the buying and selling of energy commodities. People who had vested heavily in Enron had seen their stock portfolios grow expeditiously, and most of Enron's employees were 100% invested in their retirement fund with Enron stock. Once the truth became public and investors learned the financial statements reported to the SEC (Security and Exchange Commission) were false, stock value plummeted. The actual profits reported by the company were in reality billions of dollars in losses, hidden by complex and illegal accounting practices to mislead the public from the systemic underlying truths.
