Enron: Ethics, Ethics And Ethics In Business

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Name Professor’s name Course name Date Title Enron was a company ranked by fortune as the most innovative company then in the united states .Its case was the greatest failure in the history of American capitalism and had a major impact on financial markets by causing significant loss to investors and innocent people indirectly, Recent collapses of high profile business failures like Enron, WorldCom and Tyco has been a subject of great debate and many lessons can be learned from its collapse Several factors play a role in the success of a company that are beyond the scope of financial statements alone. Organizational culture, management philosophy and ethics in business each have an impact on how well a business performs in the long term.…show more content…
It grew significantly fast over the years and obviously it affected its managers. Their focus was on aggressive growth and they did so through the process of risk taking. They started getting greedy and lacked corporate integrity. Their main goal was to maximize price per share of common stock, and they didn't care in which way it was done. They deceived investors with creative accounting and misleading profit reports. This was a matter of routine in the final months of the company. They hired Arthur Anderson, an accounting firm, as a consultant - which also handled their audits. This is a clear conflict of interest for Anderson which knew Enron's secrets, but didn't report them because of the fear of losing the lucrative consulting…show more content…
accounting organizations looked to find out how accounting fraud can be spotted sooner which then led to the brisney act. The US authorities have analysed the situation and have attempted at undoing the wrong in a variety of ways. I will summarize the efforts made by the US authorities in rectifying the discrepancies in the regulations of business practices in corporate America. Crucial Sarbanes-Oxley Act of 2002 that was conceived and implemented following the Enron disaster and the reforms presented by the New York Stock Exchange and the NASDAQ. The prolonged effect can also be observed by various changes in the procedure and involvement of the board of directors of public companies to comply with corporate governance procedures after the debacle of Enron. .One of Enron's lasting effects was the creation of the Sarbanes-Oxley Act of 2002, which tightened disclosure and increased the penalties for financial manipulation. The Sarbanes-Oxley Act is meant to bring accuracy and reliability of corporate disclosures by requiring certifications done to the quarterly and annual reports by the chief executive and financial officers.[3] The Sarbanes-Oxley Act was enforced in July 2002 following a series of high profile accounting scandals. For all financial statements that were to be filed deadlines were provided to comply with the provisions

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