The Ethics Of Enron And Worldcom

1821 Words8 Pages
The desire for money, power, and praise can lead some top executives to participate in unethical behavior to satisfy these needs. Some businesses simply fabricate their financials while others invent fake companies to inflate their asset’s value and profitability. Both situations are attempts to increase their earnings as much as possible for top executives own interests. The two most well-known and fairly recent instances of major accounting scandals include Enron and WorldCom. How did Enron, once one of the five largest audit and accountancy partnerships in the world, and WorldCom, once the United States’ second largest long distance telephone company, both end in bankruptcy just one year after the other? By exploring the history, scandal, and aftermath of Enron and WorldCom, comparing the two business’ malpractice, understanding the ethical issues involved, considering the historical context of the scandal which includes the Sarbanes-Oxley Act of 2002, and my opinion regarding the effect, it will become clear how these once successful businesses ended with criminal charges. Enron Corporation was an American energy and service company based in Houston, Texas. In 1985, Kenneth Lay merged two natural gas pipeline companies, InterNorth and Houston Natural Gas to form Enron. This new company eventually had 36,000 miles of pipe stretching across the United States and into Canada, making it the second largest pipeline network in the United States. By 1992, Enron became the

More about The Ethics Of Enron And Worldcom

Open Document