Post Mortem Examination of the Collapse of Enron and the United States Sarbanes–Oxley Act 2002: Lessons for Nigeria
Keywords:
Corporate Failures, Enron, Legislative Interventions, U.S.A, NigeriaAbstract
The challenges and prospects of rescue interventions to corporate failures in the United States is the focus of this paper. The collapse of Enron and the lessons from it to corporate Americans and indeed the world at large forms the case study of this paper. How could America’s seventh largest corporation suddenly descend to bankruptcy? The paper assesses the legislative interventions of US Sarbanes–Oxley Act 2002 by employing as a method, analytical exposition of the Act. The paper finds that governance and incentive problems contributed to Enron’s rise and fall. It argues that though the provisions of the Act are aimed at compelling corporate governance and international best practices, inherent weaknesses and inconsistencies with superior legislations leave a big question mark on their applicability and effectiveness. The paper calls for legislative rethink if the corporate world must prevent future ‘Enrons’.
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