Enron - Ethical Dilemma Essay

1129 Words Oct 15th, 2010 5 Pages
Ethical decision making: A dilemma Ethical issues have greatly transformed in our lives since the great Enron, Xerox and other huge corporations proposed big profits showing earnings of billions of dollars and yet in reality facing bankruptcy. These corporations faced great trouble with the federals and state for manipulating financial statements. But not only corporations can be blamed on this, accounting firms were involved in this as much as the corporations were. With the business stand point, ethics comprises of principles and standards that guide behavior. Investors, traders, customers, and legal system determine whether a specific action is ethical or unethical. Ethical issue is a vast subject, but we will look at the niche …show more content…
This accounting system considers current market value for assets and liabilities rather than its book value. The market value for Enron’s stock, assets and liabilities were small but the management showed higher market value and huge profits, raising market share value and deceiving their investors, shareholders and other entities that had investments in Enron. Enron executives were highly qualified from business schools holding degrees from schools like Harvard and Stanford and with decades of experiences under their belt. But that didn’t stop them from making unethical decisions. They involved everybody surrounding them from energy traders to accounting firms. The public accounting firm “Arthur Anderson” who was performing audits and producing audited financial statements was also involved in the series of fraud by signing off on Enron’s unreliable financial statements and taking million dollars a week from Enron. The law firm Vincent and Akins roughly made one million dollars a week as well by guaranteeing the business operations and frauds as being ethical for Enron. They knew what they were doing but money had blind folded them. The profits showed in the audited financial statements were deceiving which led stock holders and others investors attract to invest more in the company. Executives made Special-purpose entities [subsidiary entities to Enron] to

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