Enron Scandal And Its Ethical Implications - 1744 Words

Enron Scandal and Its Ethical Implications Introduction Enron’s collapse in 2002 was perhaps the most shocking and widely publicized ethical violations of all times. Once one of the world’s largest energy company, Enron’s downfall and the demise of its accounting firm Arthur Andersen, highlight corporate America’s moral failings. Enron was charged with substantial accounting frauds by manipulating its major accounts and by masking its massive debts. The company stock that once peaked at $90 was down below a dollar by the end of 2001, costing $200 billion dollars of investor money. A company with humble beginnings, Enron in its heydays was heralded as the epitome of corporate responsibility and ethics. This case study examines the ethical issues surrounding the Enron scandal and attempts to explore the reasons behind Enron’s ethical and economic failure. Background Enron was founded in 1985, shortly after the de-regulation of natural gas industry in the US. Enron’s growth was phenomenal and it became one of the leading companies in the power industry. The newly deregulated industry opened many doors for Enron and the company started to diversify and expand internationally. As the company grew, its culture evolved, Enron embraced a culture where employees were expected to take advantage of the newly open playing field to the most. Enron executives were rewarded through large pay packages for their ‘cleverness’ in building a company with sustainable returns. The company’sShow MoreRelatedBiblical Concepts Of Accounting And Finance811 Words   |  4 PagesWithout an ethical foundation build upon a biblical foundation accounting and finance practices are bound to fail. This paper will tie biblical concepts to accounting and finance as well highlight the implications of a secularism. Biblical Foundation Accounting serves to ensure that financial information is accurately tracked, managed and reported acorss business as well in the personal lives of people. This was as much a necessary function in biblical times as it is today. Although scandals and fraudRead MoreEthics Of Enron : A Corporate Disaster1408 Words   |  6 Pages The Ethics of Enron: A Corporate Disaster Racheal D. Smith Salem International University â€Æ' The Ethics of Enron: A Corporate Disaster Ethics, as stated by Dawn D. Bennett-Alexander and Linda F. Harrison in The Legal, Ethical Regulatory Environment of Business in a Diverse Society, are considered subjective laws as well as a how-to-guide for businesses in how they conduct themselves with their suppliers, customers, employees, and anyone else they do business with (2012). It is not enough toRead MoreThe Ethics Of The Enron Case1407 Words   |  6 PagesThe Enron case is a very popular case to show how the profession of accounting is vital to make the corporate world of business flow reliably. Enron was recognized as one of the world’s major electricity, natural gas, communications and pulp and paper’s company. However Enron was found to record assets and profits at inflated, fraudulent and non-existent amounts. Debts and losses were found to be excluded from financial statements along with other major transactions between Enron and other companiesRead MoreThe Sarbanes Oxley ( Sox ) Act Of 20021617 Wo rds   |  7 PagesThe focus of this week’s assignment is the Sarbanes-Oxley (SOX) Act of 2002. A brief historical summary of SOX will be presented, including the events leading up to its passage. The key ethical components of SOX will be identified and explained. The social responsibility implications of the mandatory publication of corporate ethics will be assessed. One of the main criticisms of SOX has been its implementation costs, and this specific criticism will be addressed in regards to smaller organizationsRead MoreAndrew Fastow : The Enron Corporation And The Pioneer Of The Financial1067 Words   |  5 PagesIn 1990 Enron market value increased from $3.5 billion to $35 billion by the end of 1999 (Ivey Business Journal, 2016). During this time Andrew Fastow was the chief financial officer of the Enron Corporation and the pioneer of the financial implication that brought Enron crumbling down. In this nine-year time frame this feat was admired by companies arou nd the globe. Andrew received a CFO Magazine award for his work at Enron and had lavish parties celebrating the results of the quarterly earningsRead MoreEthical Codes Of Conduct Are Secondary Thoughts1531 Words   |  7 PagesEnron, WorldCom and Bank of Credit and Commerce, just to name a few, runs chills up and down the spines of, well, just about everybody. These scandals swirled around several large businesses, and hinged on unethical practices – unethical accounting practices, specifically. The idea of ethics is a hot button these days in all genres. In fact, universities and colleges are including ethics in the curriculum of every discipline instead of offering an ethics major, per se (Kanaiah Kumar, 2009).Read MoreThe Influence of a Companys Leadership and Culture on Its Business Ethics1541 Words   |  6 Pagesavailable limits towards the achievement of competitive advantage (Madsen Vance 2009). The organization had the ability to execute diverse contracts thu s complex in the products and service delivery to the consumers and other transaction partners. Enron adopted a culture that facilitated the rewarding of cleverness towards the pursuit of common or collective goals by its employees following the success under the influence of diversity and complexity of innovation. The employees were encouraged toRead MoreEthics And The Auditing Culture : Rethinking The Foundation Of Accounting And Auditing974 Words   |  4 PagesAuditing. The key of the abstract is to demonstrate how traditional ethical settings led to unethical behavior and financial scandals of Enron, WorldCom, and Arthur Anderson (p. 271). The authors emphasize the role of the AICPA Code of Conduct and ethical perspectives for accountants and auditors. Introduction. The authors study profiles of firms that included the accounting fraud. The main objective of the research is to improve the ethical conduct for accountants through the demonstration of the gapRead MoreThe Ethics Of The Sarbanes Oxley Act1703 Words   |  7 Pagesforms scandals in their organizations. Such fraudulent arts are unethical and immoral behavior. This led the US government to form legislation in order to control fraudulent activities; mostly performed by senior officers in the organization. In view of this, this paper will address the following: historical summary on SOX enactment, the key ethical components of SOX, social responsibility implications regarding mandatory publication of corporate ethics, whether the criticisms of SOX implication presentsRead MoreEnron: from the Beginning to the End2542 Words   |  11 Pageshear the word Enron, they immediately associate it with the most important accounting scandal of our lifetimes. Enron was an American gas company that began as the Northern Natural Gas Company in 1931. Internorth, a holding company in headquartered in Omaha, Nebraska, purchased the Northern Natural Gas Company and reorganized it is 1979. Enron arose from the 1985 merger of Houston Natural Gas and Internorth. After building a large, new corporate headquarters in Omaha, the new Enron named former