Impact of the Enron Scandal on Accounting Standards

Impact of the Enron Scandal on Accounting Standards Abstract Every firm and its managers are expected to maximize investor returns while complying with regulatory standards, avoiding principal-agent conflicts of interest, and enhancing the reputational capital of their firms. However, in practices, being ethically is not just about giving large sum of charitys money but recognizing and acting on potential ethical issues before they become legal problems are more important aspects to taking care of. Enron collapsed as the result of unethical management practices such as the equivocation of taxes and fraudulent accounting practices. The Enron scandal is the most significant corporate collapse in the United States since the failure of many savings and loan banks during the 1980s. This scandal demonstrates the need for a close look at the ethical quality of the culture of business generally and of business corporations in the United States. Organization need to infuse ethics and integrity throughout their corporate cultures as well as into their d efinition of success. Unethical and illegal business practices at Enron led to the creation of Serbanes Oxley Act of 2002. This report will discuss and find out illegal and unethical activities, impacts on stakeholders and lessons from the Enron case. The Enron Scandal and Ethical Issues Enron Corporation is an energy trading, natural gas, and electric utilities company located in Houston, Texas that had around 21,000 employees by mid-2001, before it went bankrupt. Its revenue in the year 2000 was more than $100 billion and named as Americas most innovative companies for six consecutive years by Fortune. Enron was a company that was able to profit by providing the delivery of gas to utility companies and businesses at the fair value market price. Enron was listed as the seventh largest company in the United States and had the domination in the trading of communications, power, and weather securities (Corporate Narc, nd). At first sight, Enron looks like an excellent corporate citizen, with all the corporate social responsibility (CSR) and business ethics tools in community (Sims Brinkmann, 2003). However, the scandal of Enron has been the largest corporate scandal in history, and has become emblematic of institutionalized and well-planned corporate fraud; the Enron scandal involves both illegal and unethical activities. According to Carroll and Buchholtz (2008), the CFO Jeffrey Skilling and the CEO Ken Lay played major roles in the Enron scandal. Both of them committed securities fraud and conspiracy to inflate profit. In disguise debts of Enron, Lay and Skilling used off-the-books partnerships, after that they lied to investors and employees about the companys disastrous financial situation while selling their own companys shares (Carroll Buchholtz, 2008, p. 256). Enrons top level management has violated several accounting laws, SPE laws, and bent the accounting rules to satisfy their own desires of profit in the short term but ignoring long term repercussions for investors, stockholders, employees and the business itself. The close relationships that were formed among top leading executives and the board of directors grew arrogant, thinking they were invincible and causing them to act in an unethical manner. Enron allowed Andrew Fastow, the Chief Financial Officer to control two SPEs (special pur pose entities) that were knowingly connected to Enron, and gave him an opportunity to abuse his power. Enron also parked some of its debt on the balance sheet of its SPVs and kept it hidden from analysts and investors. When the extent of its debt burden came to light, Enrons credit rating fell and lenders demanded immediate payment in the sum of hundreds of millions of dollars in debt (Sims Brinkmann, 2003). It means that Enrons decision makers saw the shuffling of debt rather as a timing issue and not as an ethical one. They maintained that the company was financially stable and that many of their emerging problems really were not too serious, even though they knew the truth and were making financial decisions to protect their personal gains. No discussion of the Enron scandal would be complete without a discussion of the involvement of Enrons accountants, the firm Arthur Andersen. Arthur Andersen was one of many causes of the Enron collapse when they were the conflict of interest between the two roles played for Enron, as auditor but also as consultant. Andrew Fastow, the Chief Financial Officer of Enron pushed many deals across where he had a vested interested on both sides of the deal. By creating and knowingly participating in these deals, he put his financial greed above the responsibility to his position for the company. According to Paul and Palepu (2003) in 2000, Arthur Andersen earned $25 million in audit fees and $27 million in consulting fees, this amount accounted for roughly 27% of the audit fees of public clients for Arthur Andersens Houston office. The auditors methods were questioned as either being completed solely to receive its annual fees or for their lack of expertise in properly reviewing Enrons reve nue recognition, special entities, derivatives, and other accounting practices. Due to these relationships that Enron had with Arthur Andersen, it was just too easy for both Enron and the accounting firm to work together in covering up financial losses and debt. Andersen was also responsible for some of Enrons internal bookkeeping, with some of Andersens employees eventually leaving to work for Enron. The result of the accounting scandal was that many of the losses that Enron encountered were not reported in its financial statements. In November, 2001, Enron revises financial statements for the previous five years to account for $586 million in losses (Corporate Narc, nd). After a series of scandals involving irregular accounting procedures bordering on fraud involving Enron and its accounting firm Arthur Andersen, it stood at the verge of undergoing the largest bankruptcy in history by mid-November 2001. As Enron was considered a blue chip stock, this was an unprecedented and disastrous event in the financial world. Enrons plunge occurred after it was revealed that many of its profits and revenue were the result of deals with special purpose entities (Corporate Narc, nd). Enrons leaders also ignored, then denied serious problems with their business transactions and were more concerned about their personal financial rewards than those of the company. When the companys stock price began to drop as the problems were becoming public, the company was transitioning from one investment program to another. Impacts on Stakeholders Every business has a moral obligation to serve its stakeholders, whether they are business partners, customers, stockholders, or employees. Enrons bankruptcy has injured several parties including banks, stockholders, former employees, customers, suppliers, communities, and also the United States. Impacts on Employees The first thing, and most important thing the Enron scandal had an effect was the job situation. Carroll and Buchholtz (2008) argued that when Enron went bankrupt and then the Arthur Andersen accounting firm went out of business in 2002, employees were displaced and significantly affected (p. 47). Enrons financial implosion has cost thousands of employees their jobs, left thousands of people still employed by the bankrupt trader and left 5,600 employees jobless and facing retirements with no nest eggs (Carroll Buchholtz, 2008, p. 256). Many employees had their entire pensions vested in Enron stock, Kenneth Lay advised employees keep their Enron stock when the firm was crashing, and he was selling his own. While the employees were unable to sell their stock, Lay and other executives were quickly selling off many of their shares. The lives and savings of thousands employees were destroyed. They also were deprived of the freedom to diversify their retirement portfolios; and they had to stand by helplessly while their retirement savings evaporated at the same time that top managers cashed in on their lucrative stock options. Impacts on Investors and Stockholders As the result of Enron scandal, individual and institutional investors lost millions of dollars because they were misinformed about the firms financial performance reality through questionable accounting practices, and all of the shareholders lost the money that they had invested in the corporation after it went bankrupt. Shareholders lost nearly $11 billion when Enrons stock price, which hit a high of US$90 per share in mid-2000, plummeted to less than $1 by the end of November 2001 (Answers.com, 2010). Investors those who were hurt can never be made totally whole once again after the terrible experiences of Enron. Impacts on the United States and Communities Political parties, such as the Bush administration, who accepted contributions from Enron, were finding themselves in positions where returning the funds to Enron or donating them to a charitable. Enron also affected the United States in several important ways. If anything positive can be said about the Enron scandal, it is that the scandal itself heightened awareness of the importance of integrity in Accounting and business in general, and led to the creation of new safeguards to make sure that something like this would not happen again, or at least not to the full extent of the Enron damage. Enron cynically and knowingly created the phony California electricity crisis of 2000 and 2001. Between 30 percent and 50 percent of Californias energy industry was shut down by Enron a great deal of the time, and up to 76 percent at one point, as the company drove the price of electricity higher by nine times (Corporate Narc, nd). Impacts on Other Stakeholders The Enron scandal also harmed other stakeholders. For example, Enron top managers pressured Arthur Andersen to certify maximum-risk; questionable accounting practices in part to retain their consulting business and, by acceding to this pressure, Arthur Andersen won huge contracts in the short run however ultimately lost their professional credibility and client base. Some investment banks such as Citigroup, J.P. Morgan, and Merrill Lynch made over $200 million in fees from deals that helped Enron and other energy firms boost cash flow and hide debt, and, by failing to exercise their own adequate due diligence, they multiplied the harm done to other stakeholders. Citigroup and JP Morgan Chase in particular appeared to have significant amounts to lose with Enrons fall. Punishment Thousands of aggrieved employees, investors, and other stakeholders were waiting to find out what punishment will be meted out to those who covered up Enrons true financial position so successfully for so long. Three individuals that participated in the various frauds that were committed by Enron included the former president and CEO of Enron, Jeffrey Skilling; former chief financial officer in charge of LJM, Andrew Fastow; founder, former chairman, and CEO, Kenneth Lay. At first, in 2002, Enrons former chief financial officer, Andrew Fastow, and three other current and former Enron executives exercise their Fifth Amendment right not to testify at a congressional hearing. He was charged with securities fraud, wire fraud, mail fraud, money laundering, and conspiracy. It is alleged that Fastow and others devised a scheme to defraud Enron and its shareholders (Cbsnews.com, 2006). Fastow, his wife Lea Fastow and nine other former executives faced 31 more charges and 98 counts of fraud an d they were also indicted on a host of fraud, insider trading, and other counts (Associated Press, 2006). Andrew Fastow pleaded guilty to two counts of conspiracy. The plea called for a 10-year sentence and his aid in targeting former top Enron executives Kenneth Lay and Jeffrey Skilling. Lea Fastow pleaded guilty to filing false tax forms. Finally, in March 2006, Fastow had already pleaded guilty and faced up to 10 years in prison on two counts of conspiracy. Lay and Skilling went on trial for their part in the Enron scandal in January 2006 in Houston. Skilling faced 31 counts ranging from fraud to lying to auditors for allegedly lying about Enrons financial state. Lay faced seven counts of fraud and conspiracy for allegedly perpetuating the scheme. After six days of deliberations, on May 25, 2006 a verdict was reached in the Houston trial of former Enron chiefs Kenneth Lay and Jeffrey Skilling. Skilling was convicted of 19 of 28 counts of securities fraud and wire fraud and acquitted on the remaining nine, including charges of insider trading, making him the highest ranking former executive charged in the collapse of Enron. He was sentenced to 24 years and 4 months in prison for his role in one of the biggest corporate scandals in U.S. history (Cbsnews.com, 2006). Lay was convicted of all six counts against him, including conspiracy to commit securities and wire fraud and he faced a total sentence of up to 45 years in prison. However, be fore sentencing was scheduled, Lay died on July 5, 2006 due to a heart attack (Answers.com, 2010). Lessons from the Enron Case In the new economic, the Enron scandal has been being the morality lesson. The case will teach executives and the American public the most important ethics lessons. The first lesson it that both individuals and organizations or firms should only earn money by providing goods or services that have real value in the new economic. Moreover, executives who are paid too much can think they are above the rules and can be tempted to cut ethical corners to retain their wealth and perquisites. Every firms need to demonstrate that they have eliminated all off-books accounts which distort the publics understanding of the financial health of the organization and they should to pledge that they will not suspend the companys code of conduct, or at least report to the public when they do. In order for companies to prevent an Enron-like scandal, there needs to be supervision over managers and executives as they exercise their own business judgments about what is in the best interest for an organizat ion. Kirk Hanson (2002), executive director of the Markkula Center for Applied Ethics, explained that the Enron scandal demonstrates the need for significant reforms in accounting and corporate governance in the United States, as well as for a close look at the ethical quality of the culture of business generally and of business corporations in the United States. Due to the accounting frauds that occurred in the Enron scandal, several accounting firms should reorganize their employees towards remaining loyal to the ethical standards demanded by the SEC. In order for companies to prevent an Enron-like scandal, there needs to be supervision over managers and executives as they exercise their own business judgments about what is in the best interest for an organization. On the other hand, when accounting firms have been moving to sever in both auditing and consulting services for their consulting businesses, the SEC should probably adopt additional disclosure requirements. Government regulat ions and rules need to be updated for the new economy, not relaxed and eliminated. Conclusion Looking at the Enron scandal from the retrospective viewpoint of history, essentially most of the problems faced by Enron derive from the immoral and unethical actions taken on by the board of directors in their attempt to achieve personal profits. The Enron scandal changed the lives of everyone in America and perhaps just as importantly, it forced everyone to look at themselves and fully realize the consequences of reckless greed and the breakage of laws on a whim. Most of individuals and organizations had been receiving proper punishment and lessons for their relevance.

Hundreds Years War Essay -- essays research papers fc

Hundred Years War The definition of the Golden Rule is that those with the gold make the rules. In other words, those with the gold have the power as well as those with the power have the gold. History books will discuss the general reasons for war such as freedom from adversity or freedom from religion. But the real issue for any war is the thirst for power and control; and the means to finance them are the economic issues. Nations will endure years of fighting for power and control. France and England fought each other for more than a hundred years to have control of the Channel trade routes. 1 This century of warring was known as The Hundred Years' War and is the longest war in record history. It began in 1337 when King Edward III invaded Normandy and ended in 1453 when France won the Battle of Bordeaux. However, it was not a hundred years of constant battle; there were periods of truces in between. 2 One cause for the Hundred Years' War was the claim to the French throne. The conflict began when t he direct line of succession died without a male heir and the nobles decided to pass the crown to a cousin, Philip of Valois. But this left two other male cousins equally deserving of the crown; Charles, King of Navarre and Edward III, King of England. 3 Edward III claimed that he himself was deserving of the throne because his mother was the sister of the late French king, while Philip VI was only a cousin. But according to French law, no women could inherit the throne, nor could the crown be inherited through a woman. 4 "Philip of Valois chances of becoming King of France had been remote and he had not been brought up as the future lieutenant of God on Earth. Philip VI spent much of his resources on entertainment and finery with gay abandon." 5 This caused conflict with the king's subjects. Since the king was considered to be sacred and inviolable, neither cousin would challenge Philip VI. However, they would exploit the situation and King Edward III lost no time and inv aded Normandy with an army of 10,000 men. 6 This leads to another cause for The Hundred Years' War. The land along the Channel and Atlantic coasts was England's first line of defense against an invasion. England held claim to this territory from the twelth century through the marriage of King Henry II and Eleanor of Aquitaine. King Edward III was determined to gain control of the Fr... ...ot;Hundred Years' War." Compton's Online Encyclopedia. 1995. Hutchinson, Harold F. King Henry V. New York: John Day Company, 1967. Palmer, J.J.N. England, France and Christendom. London: University of North Carolina Press, 1972. Vale, M.G.A. English Gascony 1399-1453. London: Oxford University Press, 1970. --- Notes 1. Palmer, J.J.N., England, France and Christendom. London: University of North Carolina Press, 23. 2. "Hundred Years' War." Compton's Online Encyclopedia. 1995. 3. Palmer, 47. 4. "Hundred Years' War" 5. Duby, Georges. France in the Middle Ages 987-1460. Paris: Blackwell, 1987, 274. 6. "Hundred Years' War" 7. Barnie, John. War in Medieval English Society. Ithaca: Cornell University Press, 1974, 181. 8. Palmer, 120. 9. "Hundred Years' War" 10. Barnie, 219. 11. Duby, 233. 12. "Hundred Years' War" 13. Palmer, 161. 14. "Hundred Years' War" 15. Barnie, 25. 16. Hutchinson, Harold F. King Henry V. New York: John Day Company, 1967, 214. 17. Hutchinson, 214. 18. Barnie, 245. 19. "Hundred Years' War" 20. Vale, M.G.A. English Gascony 1399-1453. London: Oxford University Press, 1970, 165. 21. Vale, 215.

Analysis of ‘Diptych’ Essay

‘Diptych’, by Robert Gray is a free verse poem in which imagery is used to invoke feelings, but also specifically influence a reader’s first impression of character. Throughout the poem Robert Gray has swayed natural speech, used strong imagery and also included poetic tone to create a poem which allows insight to his childhood. Robert Gray has explored his parent’s struggles during their marriage, in the poem ‘Diptych’. He likens his childhood experiences to a diptych hinge, which is a painting, photograph or drawing hinged in two separate parts, the joint cannot function without both parts. The poem has two separated sections, one which addresses Gray’s feelings towards his mother and the other aimed at his memories of his father. The two parts of the poem are very different and the reader is influenced during the poem by the tone and language which Gray uses. He displays his mother as a warm and caring woman, she acts based on her emotions and this is shown through her marriage and her ability to take care of things that needed to be done. To communicate his emotions, the first part of the poem, which addresses his mother, has a sympathetic poetic tone. In the second section Gray’s father is displayed as quite opposite to his wife, he is portrayed to not be fuelled by emotions and rather by manners and the preservation of his reputation. Throughout the poem Grays parents are shown to be quite opposites of each other, yet they also have a mutuality in their relationship. The example of his parents allows Gray to communicate to the reader how people may be close to each other but entirely unalike. Gray has used poetic techniques such as punctuation, asides and a careful choice of words to convey meaning to the reader in his poem, ‘Diptych’. The portrait of his mother explores her strengths in the family, she is able to hold off a bull in her garden, ‘†¦she forced it, through the broken fence, it bellowing†¦Ã¢â‚¬â„¢. The use of words like ‘forced’ display her strength and show her duty of care. A sympathetic emotion is expressed with the words, ‘†¦stay awake in our old weatherboard house’, they communicate to the reader, his mother’s ability to show affection and place others above herself even when she is unhappy with the situation. An example of use of punctuation is shown in the part ‘†¦. This other night, my mother was reluctant to go out, and leave us kids asleep, and fell asleep herself†¦Ã¢â‚¬â„¢ this punctuation gives insight to the anxiety and worry of the situation. In the opening lines Gray has portrayed his father as unfavourable in comparison to his mother. The asides, added to include more information, aid in the portrayal. For example the inclusion of the car crash story as well as mention of his father’s drinking, ‘†¦in his state†¦Ã¢â‚¬â„¢ convey unpleasant feelings to the reader. The poem allows readers to feel the emotions which Robert Gray felt as a child. The struggles and differences between his parents have been highlighted by the specific use of punctuation and language. The form and structure of ‘Diptych’ greatly contribute to the meaning of the poem. Firstly the poem is visually placed in two parts, 1 and 2, which display an extreme change in the poem. Gray has used this to firstly talk of his mother, and then in part 2 discuss his father. The two sections of the poem are separated by the numbers, but are linked together; this is a representation of both a diptych hinge and the relationship between Gray’s parents. This structure adds to the influences Gray has over the reader of the poem, the gap between his parents is made clearer when their descriptions are not place together. The structure is another example of how Gray has been able to convey his emotions and a concept more clearly to a reader. The form throughout the poem follows no poetic structure. ‘Diptych’ is a free verse poem, and so the structure of it does not have a specific order, it is instead structure to become more dialectical. Gray has also placed words on detached lines as to be read in a way which follows natural and conversational speech. In some cases he has used this pause or separation of words to have a difference of placement allowing the reader to gain more information about what he has conveyed. The structure and form of the poem ‘Diptych’ has specifically been used to convey a stronger meaning to the reader. Robert Gray has effectively conveyed the emotions involved in his parents struggling marriage in the poem ‘Diptych’. He has also addressed the issues involved between people who are different to each other, and yet who are often in close proximity. ‘Diptych’ is a free verse poem in which Gray has correctly used imagery and poetic techniques to communicate his personal emotions to a reader.

The Main Cause Of The Great War - Free Essay Example

Sample details Pages: 7 Words: 1953 Downloads: 4 Date added: 2019/05/16 Category History Essay Level High school Topics: War Essay World War 1 Essay Did you like this example? Little did I know that the Assassination of Archduke Franz Ferdinand is one of the main causes of World War 1, it is interesting. World War 1 is also known as the Great War, because it literally the greatest war, many people were affected by it. This war began in 1915, after the assassination of Archduke Franz Ferdinand. Don’t waste time! Our writers will create an original "The Main Cause Of The Great War" essay for you Create order The war, of course, began between Austria Hungary and Serbia and eventually grew into a great war that involve 32 countries. The central powers included: Austria Hungary, Bulgaria and Ottoman Empire and they were fighting against the Allied Powers included: Great Britain, France, Russia, Italy, Romania, japan and the United State. There were many causes of the Great war. But the main cause was the death of Archduke Franz Ferdinand . Ferdinand was the Heir to the Austro-Hungarian empire who was respected by many subjects, I guess he was a great leader however, Ferdinand believed the Serbs to be pigs, thieves, murderers and scoundrels and that was that is why the Serbians were furious with Ferdinand. Ferdinand was traveling with his wife to Sarajevo to inspect his troops. It was in June 28, 1914 that Ferdinand and his wife Countess Sophie Chotek were traveling in an open top car through Sarajevo street. There was a Black Hand Gang, a citizen from this gang who is Serbian called Nedjelko Cabrinovic, heard that Ferdinand and his wife were visiting. He threw a bomb as soon as he saw the vehicle, but it missed, and it hit other people behind them. Ferdinand and his wife wanted to go to the hospital to visit these wounded people and on their way to the hospital, the driver took a wrong turn. The turn took th em to where one of the Black hand Gang was waiting and he took his shot and got them killed. This assassination set off a chain of events which descended into war. The Austria-Hungarian government blamed Serbia for the attacks and sent them an Ultimatum. Archduke Franz Ferdinand was born to Archduke Karl Ludwig of Austria and Princess Maria Annunciata of Bourbon- Two Sicilies in Graz, Austria, on December 18, 1863. He was a member of the House of Hapsburg, the rulers of the Holy Roman Empire, the Austro- Hungarian Empire and the Spanish Empire. He began his military career at age 12 and was quickly promoted through the ranks becoming a major general at the age of 13. In 1889 the emperors son commit suicide, Crown prince Rudolf. And then in 1896 the Emperor died from typhoid fever. And so, Franz Ferdinand was groomed to inherit the throne. And because he inherits the throne he was required to marry someone who is reigning or formally reigning dynasty of Europe. Franz met a Choteks girl and was fell in love with her but unfortunately, shes not royal so they kept their relationship as a secret until they were caught. The Emperor Franz Joseph did not approve of this couple but surprisingly the couple was married on July 1, 1900 . The couple had three childrens: Sophie, Maximilian and Ernst. The primary source of Franz Ferdinands was as soon as he was throne he proposed to replace Austro-Hungarian dualism with Tribalism, which is a triple monarchy in which the empires Slavs would have an equal voice in government with the Germany and Magyars. He was also considering the idea of a federalism made up of 16 states; the aim being to avoid disintegration of the fading Austro-Hungarian empire. General Oskar Potiorek invite Franz Ferdinand to visit the capital of Bosnia, Sarajevo, to inspect army manoeuvres and he accepted the invitation . Bosnia and Herzegovina were provinces that have been under Austro-Hungarian administration since 1878. Austria took over these provinces outright in 1908 and it upset the governments in the west and it led to an outrage of Serbian. Because they wanted the provinces to be a part of a Serbian led pan-Slav State instead of being a part of the Austro-Hungarian empire. As we learn about the group who killed Ferdinand and his wife. This group is called The Black hand. Their reaction to the situation was all for the freedom Serbia from the Austro-Hungarian rule . They were also known as a terrorist group who decide to assassinate Franz Ferdinand during his visit to Sarajevo on June 28, 1914. Ferdinand and his wife were in the third car of a motorcade traveling through Sarajevo to the Town Hall. As the Black Hand Gang learned earlier that Archduke Franz Ferdinand is visiting, they had several assassins positioned along the route. This couple were traveling through this town without expecting what will happen. On the way to the Town Hall, they unexpectedly experience the first assassination attempt. A man Named Nedeljko Cabrinovic threw a bomb into the car with the Archduke. However, the bomb bounced off the car and landed under the next car in the motorcade. And the car with the Archduke was able to speed away and make it safely to the Town Ha ll. Archduke Franz Ferdinand was upset. As the Mayor was giving a welcome speech at the Sarajevos city on June 28 1914, Ferdinand angrily interrupted the major saying What is the good of your speeches? I come to Sarajevo on a visit, and I get bombs thrown at me. It is outrageous! . The assassins did not give up, however. On the return trip, the motorcade took a wrong turn. When the driver began to back up, another assassin named Gavrilo Princip happened to be the right next to the car. He took advantage of this opportunity and began firing at the Archduke . He fired twice, hitting the Archduke once and his wife Sophie. Gavrilo Princip was jumped by the crowd and was arrested by the police. As the car was speeding to the Governors residence to get medical help it was too late. Sophie was already dead before they arrived, and the Archduke died a few minutes later. Franz and his wife were buried in a crypt beneath the chapel of his castle, Artstetten. The assassination provided Austria-Hungary with an excuse to act against Serbia. Austria- Hungary government saw the assassination as a direct attack on the country and believed that the Serbians had helped the Bosnian terrorists in the attack. The Austria would made cruel demands on the Serbians under hatred but eh Serbians always rejected it. At the same time, the Russian began to rally up their army to help protect Serbia. Because the Serbians kept rejecting the demands from the Austrian the Austrian then declared war against Serbia. And few days later, the Germany rally up their army against Russia, the Germany became allied to the Austria-Hungary. And then the France appeared in and rally up their army to help its ally Russia and so Germany followed by declaring war against France . And World War 1 had begun. Interesting how this assassination of two people results in a greatest war. I have been thinking a lot about how much these people support their leader and how much they value their appointed leader and their country. Politically, it shows how good their government is. And I bet they govern their governments good. Now the memory of Archduke Franz Ferdinand will forever be remembered by his people during his reign. And I have seen how much some countries never support their leader like how the Austrian-Hungary did, that they ended up creating this huge war which was called the greatest war. As I mentioned earlier how all these other countries decided to get involved in the war between Austria and Serbia, so they can support their allies. The countries were divided into two powers. Central Powers: Austria- Hungary and Germany and the Allied Powers: Russia, France, Great Britain and Italy. The modern world had lived to see how horror caused from these wars. By the time armistice was signed, November 11, 1918, 20 million people had been killed and that includes 113, 000 U.S. soldiers and 20 million people wounded . The aftermath of the World War 1 is still being felt after it concludes. There were several effects of World War 1: the downfall of four monarchies which are Germany, Turkey, Austria-Hungary and Russia. The war made people more open to other ideologies, such as the Bolsheviks that came to power in Russia and Fascism that triumphed in Italy and even later in Germany. World War 1 also marked the end of colonialism, as the people became more nationalistic and the one country after the other started colonial revolts in Southeast Asia, the Middle East and Africa . Also, the war changed the economical balance of the world, leaving European countries deep in debt and making the U.S. the leading industrial power and creditor in the world. Due to the cruel methods used during the war and the losses suffered, WW1 caused a lot of bitterness among nations, which also greatly contributed to WW1 decades later. The social life also changed, the women had to run businesses while the men were at war and labor laws started to be enforced due to mass production and mechanization. People all wanted better living standards. And, WW1 boosted research in technology, because better transport and means of communication gave countries and advantage over their enemies. Those are some of the effects from WW1. There are many other effects, but the fact of the matter is that after this devastating war, the world was never be the same anymore. Other historians agree that WW1 created an atmosphere that allowed the rise of the Nazi Party and the start of WW2. Anyways, WW1 had some consequences that I would like to be mentioned in my paper. Economically, World War 1 cost the participating countries a lot of money. Germany and Great Britain spent about 60% of the money their economy produced. Countries had to raise taxes and borrow money from their citizens. They also printed money to buy weapons and other things they needed for war. Politically, World War 1 brought an end to four monarchies: Czar Nicholas II of Russia, Kaiser Wilhelm of Germany, Emperor Charles of Austria and the sultan of the Ottoman Empire had to step down. And socially, World War 1 changed society completely. Birth rates went down because millions of young men died. Civilians lost their homes and fled to other countries. The role of women also changed. They played a major part in replacing men in factories and offices. Many countries gave women more rights after the war had ended, including the right to vote. Those are some of the consequences from World War 1. The Great war also known as World War 1 was the cruelest war ever happened. A lot of people died and so many changes were made from this War. some of those changes are still visible in todays world. So, what? I never knew the history of the Archduke Franz Ferdinand until I decided to write a paper about the great war. And this guy is a real history that we should all know and remember because it was his death that causes the great war. His assassination led to World War 1 between his country and the country who assassinate him and his wife and got other countries involve. And then it set off the stage for World War 2 and so forth. The history of this man matters in todays time and forever. And like I mentioned earlier that the fact that the Austria-Hungary started threatening the Serbians of the attack and ended up starting the war for the sake of their one and only leader who was killed symbolize how unison these people are. And I guess Archduke Franz Ferdinand was really is a great leader and someone that everyone in his country support and love. But what if the Austrian did not support Ferdinand and their country, I bet there will never a war.