Smart Guys In the Room Complete Essay Example for Free

Smart Guys In the Room Complete Essay The documentary film, the Smartest Guys In the Room was written and produced by Alex Gibney, who is also the writer and producer of Eugene Jareckis â€Å"The Trials of Henry Kissinger†. This documentary is mainly and exanimation of the way a corporate giant rose and fell due to financial and accounting malpractices by the executives of the company, Enron: The Smartest Guys in the Room. This film documentary is based on a book written by the Fortune Magazine reporters namely Bethany McLean and Peter Elkind. It starts in the scene whereby Enron executive Cliff Baxter is re-enacted after which the films takes the viewer through a flashback whereby the chairman of Enron, Mr. Kenneth Lay is described as a person from a humble background with his father being a preacher hence the reference of him, as a son of a preacher. The film also depicts the life of Mr. Kenneth and how he managed to rise up in his career in the corporate world, the development of various business strategies which he applied in the natural gas business and also the kind of relationship which he had with the family of the then president Bush. From the film, one is able to observe that the financial and the accounting malpractices started long time as early as the year 1987. During this period, various outrageous and risky practices and profit skimming were encouraged by Lay of two traders involved in oil trading in Enron’s office at Valhalla. This was due to the reason these traders used to bring a lot of money to the company through the oil trade with the company. The arrival of the CEO Jeff Skilling brought extensive and aggressive form of accounting philosophy which became part of the practices of the company. From this documentary, The Smartest Guys In the Room, it can also be observed that the company went to great lengths through various malpractices so that it could appear to profitable yet it was not. The true financial situation and position of the company was worse although the investors were made to believe that the company was performing well. The executives applied crude ways of ensuring that they win at any costs. The executives of the company bare portray as ones who are more concerned with creating an image for the company and do not care whether the practices which they apply are acceptable and beneficial to the shareholders and even other stakeholders such as the employees of the company. The executives employed illegal ways of doing business which included offering huge contracts for their financial analysts so that they could not portray the true picture of the firm. Furthermore, the executives as observed in the documentary decided that the company could loan money to itself hence hiding the huge debts of the company, giving the wrong impression to investors and other stakeholders of the company. It is also observed that the company made use of the deregulation of the state of California to control and manipulate the market for electricity therefore affecting the supply of electricity. The use of characters such as Mr. Kenneth who was known as a son of a preacher brings contradiction to the film, since a preacher’s son is never expected to involve in wrong practices but that is not the case. This shows the viewer that the face value of something may never always be the exact value of that particular item hence there is need for extensive and further investi8gation. In the film, the executives are also shown as greedy since they manage to keep for themselves riches at the expenses of everyone else who were involved with the company. The employees lost their jobs as a result of the actions and the malpractices of the executives in addition to the investors who lost their money in the company. The general depiction of the film is about capitalism which is demonstrated through the actions of the executives of Enron. The film, Smart Guys in the Room is a demonstration that financial and accounting practices should be regulated and closely mo0nitored to avoid adverse effects on the economy. Giving a free hand to a company and allowing a lot of freedom for the executives of a company may lead to practices which cause the failure and even death of a company. Capitalism has had great negative impacts on the economy of the United States since the companies were allowed to run as they please and not stringent measures and financial reporting and regulations were put in place. The documentary, Smart Guys in The Room, clearly brings out the importance of the various accounting and financial reporting standards which have been set for companies to follow. The executives of any given company must be held accountable for their actions and must always know that their priority goal is to provide true financial position of the company they manage. It is the duty of the investors also to take control and monitor the practices within the companies they invest in to avoid issues such as that if Enron. References Enron-The Smart Guys In the Room, (2005), viewed from www.youtube.com/watch?v=gxzLX_C9Z74 on 28th June 2014. Source document