After Effects of Enron Scandal and Sarbanes-Oxley Act on the American Market

784 Words Feb 3rd, 2018 3 Pages
This template argues that the fiscal responsibility of the business is paramount, and sometimes ethics and moral tend to be pushed to the backburner (Savage and McEltory, 2005). This is particularly true when one adds the necessity of ethical responsibility from business professionals. The Enron Scandal, for instance, became a global call for accounting reform and clearly reduced the public's confidence in the corporate environment. Briefly, Texas-based energy company Enron used one of the nation's most prestigious accounting firms, Arthur Anderson. Enron employed over twenty-thousand people and had revenues over $100 billion. Forbes magazine called the company one of "America's Most Innovative" for five years. However, a company whistle-blower told Federal regulators that much of Enron's reported data, signed off on by Anderson, was false.Essentially, Enron reported sales incorrectly, thus the balance sheet showed profits that were false, but increased the organization's stock price and value. Because of the scandal, both companies filed for bankruptcy. The case was so well publicized that the name "Enron" is now synonymous with scandal, corporate greed, and dishonesty in accounting (Bryce, 2002; Peregrine, 2011).
As a direct result of the ENRON scandal, the United States government began to pressure…
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