I bought and read The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron by Bethany McLean and Peter Elkind as a recommendation from my mentor, an auditor from Houston, Texas, USA. The book tells the story of Enron, the 'largest energy company in the world', it's rise and fall.
Enron employed over 20.000 people, with claimed revenues of $111 billion in 2000. Fortune named Enron "America's Most Innovative Company" for six consecutive years. In 2001 investigations revealed that Enrons financial condition was achieved mostly by systematic and planned accounting fraud. Enron has since become a symbol of corporate fraud and corruption.
McLean and Elking tell the story from the beginning, trough mergers and management's plans to make an energy company 'hip' and 'innovative' - an impossibility nowadays, but something to strive for in the 90s market. However, that was not possibl without fraud. McLean and Elkind build an impressive story about a company that promised Wall Street and investors too much, and bit by bit got tangled up in more and more complicated finacial vehicles and arrangements, that in the end were fraudulent and illegal. It doesn't show the main players as especially bad people, just people who'd lost their sense of reality. I guess that's the way most bad things in the world happen: by accident, misunderstanding and lack of hard facts.
I enjoyed this book, as it is close to my work, and was written in a factual but interesting way. I recommend to anyone with an interest to finance, accounting or corporations today.