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A number of questions and issues have been raised following
the collapse of Enron Corp. -- the nation's seventh biggest
company. The following University of Houston faculty can provide
comment on ongoing accounting, legal, economic and energy
industry related topics.
Topics Covered:
Accounting/Auditing
Bankruptcy
Bankruptcy Law and Ethics
Corporate Law
Corporate Leadership and Culture
Criminal Law and Legal Ethics
Economic Impact
Energy Industry
Securities Regulation
Whistle Blowing
Advanced
Accounting and Auditing:
Scott Whisenant (pronounced "Whis'-knant")
Assistant Professor of Accounting
281/778-7497 (home)
713/743-4852 (office)
ScottWhisenant@uh.edu
Financial Statement Analysis, Valuation, Advanced Accounting
and Auditing
"It is difficult enough for audit firms to remain objective
while receiving, in the case of Enron, $25 million for audit
services. Yet, the problem of maintaining objectivity as auditors
is further compounded when audit firms simultaneously generate
consulting revenues for other business units within audit
firms. After the auditors refer their clients to the consultants
within the audit firms, audit firms sometimes generate more
consulting fees than audit fees. If nothing else, this creates
the appearance of loss of objectivity."
Video
Clip: Enron investigation could trigger audit reforms
Video
Clip: Was Enron a systematic failure of checks and balances?
Bankruptcy:
Ron Singer
Professor of Finance
713/743-4771 (office)
rsinger@uh.edu
Causes and effects of bankruptcy; economic and financial impact
of bankruptcy
"With the Chapter 11 filing, Enron will have some breathing
room, time to develop a strategy to meet current obligations
while formulating a reorganization plan that will be acceptable
to its creditors, stockholders and the court, one that will
include a debt repayment schedule. If Enron can successfully
navigate the bankruptcy reorganization maze, it will have
a good chance at surviving," says Singer.
Bankruptcy
Law:
Nancy Rapoport
Dean, UH Law Center
713/743-2100 (office)
NRapoport@central.uh.edu
Bankruptcy ethics, Chapter 11 Bankruptcy, professional responsibility,
legal education.
"By filing bankruptcy Enron might have a chance to restructure."
Rapoport says. "Enron, in theory, could sell off parts of
its business and keep others. The only limit to a Chapter
11 plan is that it meets the legal requirements of confirmation
– other than that, the only limit is the lawyers’ imaginations."
Corporate
Law:
Douglas Moll
Associate Professor of Law
713/743-2172 (office)
713/661-1969 (home)
dmoll@central.uh.edu
Merger legalities; business and corporate law; business
and corporate litigation; commercial law; corporations
Corporate
Leadership and Culture:
Timothy McMahon
Professor of Management
713/743-4651 (office)
tmcmahon@uh.edu
Organizational change; organizational change; leadership;
job satisfaction
"Enron fell victim to a phenomena that I call the ‘Enron
trap’ which is characterized by top management arrogance.
The company had a strong culture that significantly impacted
behavior and attitudes. Their philosophy was ‘we don’t have
to follow the rules because we make the rules.’ This arrogance
and philosophy led to their downfall.”
Criminal
Law and Legal Ethics:
Robert Schuwerk
Professor of Law
713/743-2136 (office)
Criminal Law and Legal Ethics
"Enron and Arthur Andersen are now being more scrutinized
than before - illegalities could be found. If so there are
going to be a lot of concerned lawyers out there. Lawyers
have an obligation to not participate in any illegal actions
or practices. Regarding the Securities and Exchange Commission
- they receive thousands of financial statements. If a corporation
appears to be doing well, they are not going to be concerned
as much. The accountants choose how to present their figures."
Economic
Impact:
Barton Smith
Director, Institute for Regional Forecasting
713/743-3834 (office)
281/370-5125 (home)
bartsmith@aol.com
Impact of Enron events on the Houston economy; urban economics;
economic impact analyses.
Energy
Industry:
Michelle Michot Foss
Institute for Energy, Law & Enterprise
713/743-4634 (office)
832/326-4370 (cell)
mmfoss@uh.edu
Impact of the Enron developments on the energy industry;
business and public policy of energy development; deregulation;
industry restructuring.
Securities
Regulation:
Robert Ragazzo
Professor of Law
713/743-2146 (office)
rragazzo@central.uh.edu
SEC insider trading issues; viability of shareholder lawsuits
and other corporate issues.
Whistle
Blowing:
Abigail Hubbard
Assistant Professor of Management
ahubbard@uh.edu
Corporate whistle blowing; organizational power, politics
and culture; organizational behavior and management theory;
and international business/cross cultural management
“Whistle blowing is common in industries that are regulated
by public oversight committees. Essentially any company that
owns government contracts, like NASA, chemical corporations
and infrastructure companies, encourage whistle blowing in
an anonymous way. To establish a true public oversight committee,
a company’s policy, practice and culture must support it;
else employees deem it lip service. In the case of Enron and
Sherron Watkins, Watkins didn’t take a big risk because the
company was already troubled at that point. In other cases
though, high risk and moral courage are required.”
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