Legal Issue-Enron

1774 WordsOct 30, 20128 Pages
Legal Issue in Business: The Case of Enron [Name of the Writer] [Name of the Institution] Legal Issue in Business: The Case of Enron Introduction Business ethics is based on normative ethics , standards that ethics are upheld and applied specific to distinguish what is right or wrong, that is to say what should be done or who should not be fact. However, with few exceptions, business ethicists are usually less interested in the foundations of ethics (meta-ethics) or by the principles of justification ethical principles: they show themselves more concerned with practical issues, and any obligation specific practice that may apply to the activity and the relationship to economic (Swartz, 2004). Discussion and Analysis…show more content…
Enron Exposed another Problem Another problem that needs to be identified is that the information it filed with the SEC was stale. Although the Enron financial reports were raising some eyebrows on Wall Street as a result of its rapid growth, changes in its business operations, and widespread use of special purpose entities, no one at the SEC was concerned. The SEC had planned to review Enron’s 2001 annual report after concerns over its accounting were raised in the press, but Enron’s bankruptcy mooted the issue, and no report for that period was ever filed by Enron. After Enron’s failure, Sarbanes-Oxley required the SEC to review the financial statements of all public companies at least every three years, one-third each year. The SEC was able to conduct a cursory review of only 23 percent of filings in 2003 and had trouble finding staff to do more, filling less than a third of its vacancies in the first half of fiscal 2004. A Government Accounting Office report also found that the SEC was lagging behind in computer technology to aid in its mission. Auditor Liability As noted, the SEC and the Justice Department have broad powers to investigate that far exceed those of the auditors, but SEC and Justice Department investigations, for even a limited reporting period, take years and the resulting prosecution even more years. A case in point is
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