The Enron scandal and regulatory compliance affected many industries – including travel and tourism. Regulatory compliance, in the United States, just means simply that a company and its employees are following through with the regulations and the laws that govern what is good, and ethical business practice. In some cases these are just guidelines, in other cases they are laws that are subject to civil or criminal prosecution. One way in which the president or the CEO of a company keeps track of this is thought the collection of data, specifically termed “compliance data”.
This refers to all the data, the books, the records of transactions, that could be used during an investigation, with the purpose of either confirming that corruption or scandal has taken place, or used to confirm that it has not, that the company was following all the rules or laws that they were responsible for following. It gives relevance to either the government or the judicial system that will validate completeness and consistency. Compliance.
During the 1990′s, the United States was experiencing a boom in the economy. And then, what came to symbolize greed and excess in the corporate world happened, the Enron Scandal of 2001. For six years running, 1996 through 2001, the Enron Corporation was sited in “America’s Most Innovative Company” list created by the Fortune magazine. And not long after the list was published, in December of 2001, the Enron Corporation filed bankruptcy. This was one of the United States’ largest filings for bankruptcy in United States history. This demise of the company was the result of the failure for them to disclose certain information, for failing to be transparent and honest in their business practices.
Employees had taken part in falsifying the profit reports, in using methods of accounting that did not follow regulatory compliance procedures. On both sides, internal and external, the profits that had been disguised for so many years had gone unnoticed, or unsuspected. The management team of Enron had managed to take down their own company, and then left with millions of dollars in their pockets. The regular employees however were not as lucky, as many of them fell into financial ruin as a result. This resulted in many in the business community of the U.S. (Including travel) being a bit shaken up, and new laws were created so it would become more difficult for this to happen in the future.
Information provided by Veriti Consulting specialists in forensic accounting