This essay is about the address to some issues based on the video I watched called Bigger Than Enron. The general background of this is as follows. As for Waste Management, they stretched out the useful lives on their real estates, factories, and instrument. For instance trash bins, trucks to name but a few. The following paragraphs aim to answer questions like the way of impact of the depreciation calculations on these assets, and whether the expense of depreciation will ascend or descend, and its corresponding reasons. And lastly, it is about the impact on Waste Management’s earnings image. The following will specify the above.
First of all, as for Waste Management itself, they introduced the practical and useful lives on their properties. And indeed it has some influence on the depreciation calculations on these assets like real estates, factories, instrument and things like that. To be more specific, Enron’s failure is not happened at a sudden. Its backdrop is passionate that drove the American corporations to perform bigger earnings annually. And this is somehow is a culture of gamesmanship, that is to say it is right to bend the obligations to tweak the numbers and let clear and crucial discrepancies slide a gamesmanship in a place where the corporation has been to the longings and heavy pressure of Wall Street. So it is of course it does harm to the depreciation calculations without any doubt. What is more, those analysts rather than into the truth of the calculations, instead the watch dog’s account for a bigger part of it. It is very necessary for us to pay attention to whilst our corporations were playing at a fast speed and at the same time loose with their books. In fact, the analysts, lawyers, bankers and Securities of the stock even Exchange Commission, they are the accountants who have the legal responsibility to assure us of that the numbers, and of course depreciation calculations of the financial reports are honest rather than fake figures. They are the first line of defense but they failed to do so especially like Arthur Andersen who audited Enron’s books. They failed to protect us, and of course tell us the truth.
In the second place, it is about whether the expense of depreciation will ascend or descend, and its corresponding reasons. Specifically speaking, according to the video I watched, one thing I am sure with it is the increasing of expense of depreciation. The expense of depreciation will increase out of some reasons. The first thing is the heavy pressure from CEOs. We can see every CEO was out to boots his corporation in the way of beating the expectations of others, and push their numbers to the limit and some often beyond the incentives were dramatically high. Another reason for the increase of the expense of depreciation is the attempt aimed at personal earnings. A lot of people argue that they can make a fortune by just getting the stock to move a few dollars, so of course the expense of depreciation naturally go high.
In the final analysis, concerned wit the image of Waste Management’s earnings, it is obvious some negative effects will bring about out of its profit seeking ideas. And the only way to do with it is do not make fake figures, instead they should tell the right information to the people.