Ethics And A New Accountant's Perspective On Enron

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The Law, Ethics and a New Accountant’s Perspective on Enron Ethics is a decision one makes in knowing the right thing to do and actually doing the right thing. They are the rules of behavior based on one’s belief of what is morally good and bad. A person may hear the word ethics and immediately think of government or the law. Not only does ethics have a role in government, it also plays a major role in business, including accounting. Schroeder, Clark & Cathey (2014) state that the “reason for a high level of ethical conduct is the need for public confidence in the quality of services provided by the profession” (pg. 624). Ethical conduct not only encourages a high standard of performance; it also encourages a high quality of professional…show more content…
Morals and virtues also play a major role in one’s ethical behavior. Morals are rules that one learns as a result of their childhood upbringing and culture. Morals differ from ethics because morals are personal in nature; on the other hand, ethical standards must be same for everyone. Virtues are positive character traits such as integrity and honesty, which a person develops over time. Moral and ethics are classified as good and bad, while laws are categorized as right or wrong. A person’s ethical beliefs not only influence their decisions on a day-to-day basis, they also influence business decisions in many ways. Seldom are ethical decisions clear and concise this is due to the fact that a person’s culture and demographics influence their ethical decisions. As a new accountant employed by Enron one of the first red flags would have been their mark to market accounting method. This method allowed the company to value an asset or liability at the current market price. In doing this, they were able to pick any value that would make their books look good. Executives at Enron were able to speculate and record projected earnings from natural gas and record these unrealized earnings as revenue. This accounting method is subjective and easily manipulated. As the recording of
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