After Enron first describes the conditions that led to the collapse of
Enron and other corporate scandals and the concerns that these
developments raised among the public, the press, and political
officials. The book then describes and evaluates the initial private and
public responses to these developments and concludes that most of these
responses were unnecessary, harmful, or inadequate. There are four major
lessons learned during the post-Enron scandal era: Don't count too much
on financial accounting. Don't count too much on auditing. The tax
system is an important part of the problem. The rules of corporate
governance do not adequately serve the interests of general
shareholders. After Enron addresses the major lessons for public policy
affecting accounting, auditing, taxation, and corporate government. It
proposes a set of policy changes to address the lessons learned from the
Enron scandal. The first major set of proposed changes would delegate
the authority to establish and monitor accounting and disclosure
standards to each stock exchange. A second major proposal would replace
the corporate income tax with a cash flow tax. And a final set of
proposed policy changes would replace the rules of corporate governance
that are now biased against the interest of the general shareholders.
The most distinctive feature of the book is that the major proposed
policy changes would address the problems illustrated by the corporate
scandals by reducing and focusing the role of government.
