If you are studying enterprise risk management for the first time, you might be wondering why the account- ing profession is such a strong proponent of the ERM movement. To answer this question, we need look no further than when the Enron Corporation declared bankrupicy in 2001, with dramatic repercussions on Arthur Andersen, the public accounting firm that con- ducted the audit of Enron's financial statements. To most U.S. investors. Enron will be forever linked lo the notion of corporale fraud. Formed in 1985. Enron was an energy company headquartered in Texas that enjoyed phenomenal financial success during the 1990s. Enron's reporlcd revenues grew from $9.2 billion in 1995 to $100.8 billion in 2000, a period that coincided with the deregulation of several energy markets. In the wake of Enron's bankruptcy in 2001. cvidence emerged to suggest that the firm's rapid growth was fucled not by its ability to capitalize on deregulation but instead by questionable accounting practices. For cxample. Enron recognized as income the discounted cash flow from highly questionable long-term contracts, a practice that greatly inflated its revenue flows. The firm also mini- mized its reported liabilities by moving its debt off its balance sheet and into special-purposc entilies that it did not own (such as limited partnerships) but finan- cially secured with Enron assets. In response to its bankruptcy, financially devastated