The Enron scandal is already part of the history as one of the reasons why Business and Accounting Ethics had become more than ever a major concern in today’s businesses. In this paper we’ll review and analyze all the major reasons why will Enron collapse. To begin with, Enron in only 15 years grew rapidly and became of the biggest companies in the United States. Enron employed more than 21,000 people in more than 40 countries. Everything was running perfectly; however, one day unexpectedly the company
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Enron Ponzi Scheme Enron Ponzi Scheme The Enron scandal was a corporate scandal that involved the American energy giant Enron Company based in Houston, Texas and the auditing and accountancy-consulting firm Arthur Andersen. The scandal was uncovered in October 2001. Enron Corporation was undoubtedly a giant corporation and in fact, some individuals suggest that it was one of the largest energy companies’ world over. It comprised of a multibillion corporation that employed several individuals
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their egoism, self-interest. As a result, their irresponsible behaviour led the company into bankruptcy with numerous executives charged with criminal acts. The failure of leadership was also one of the individual factors that contributed to the collapse of Enron. The actions of Enron’s leadership did not match the company’s expressed vision and mission as well as it values. If Enron leaders like Kenneth Lay and Jeffrey Skilling had also adopted strategic leadership, they could have also become able
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Consequentialists’ theory: Many philosophers believe that the rightness and the wrongness of any action are determined from its consequences and people who hold this view is known as consequentialist. Consequentialism is general approach to ethical dilemmas which inquire about the consequences to relevant people of making a particular decision. So basically consequentialism word itself suggests that it is an ethical approach which “depends on the consequences”. This view is also sometimes referred
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Executive Summary In this case of accounting fraud at WorldCom, we have identified problems which had grew as the business scale of WorldCom (formerly known as LDDS) expanded, its direction of business started to drift away when its attempt to merge with Sprint was terminated by the U.S. Justice Department and the telecommunication industry started to deteriorate in 2000. The managers, particularly Bernard J. Ebbers and Scott Sullivan, struggled to maintain the company's main performance indicator
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anything illegal such as falsifying profit reports. Standards for all manner of businesses from the small store to the international multi-million dollar industry are getting higher and frankly, this is a change that, in light of catastrophes like the collapse of WorldCom, was a long time coming. Introducing the reality of auditing standards mostly, auditors only bother paying attention to transactions that appear to be out of the norm (Glater, 2002). The tedious run of the mill activities of a business
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quoted by Nakayama (2002) argues that the Enron scandal is the most significant corporate collapse and it demonstrated the need for significant reforms in accounting and corporate governance, as well as a close look at the ethical quality of the culture of business generally. There are many causes of the Enron collapse. Among them are the conflict of interest between the two roles played by Arthur Andersen, as auditor but also as consultant to Enron; the lack of attention shown by members of the
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* Enron Questionable Transactions Question 1 The question which segment of its operations got Enron into difficulties is simple to answer, everything. Almost every all segments of their operation were improper. First of all, they practice unethical and dishonest practices which victimized workers, consumers, taxpayers and stockholders. Enron created partnerships within their own organization which led to them creating new financial instruments, called SPE’s (special purpose entities) which
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THE ENRON COLLAPSE The Androids Under Attack case was similar to the case of Enron Corporation. It was formed in 1985 from a merger of Houston Natural Gas and Internorth, Enron Corp. was the first nationwide natural gas pipeline network. Over time, the firm’s business focus shifted from the regulated transportation of natural gas to unregulated energy trading markets. The guiding principle seems to have been that there was more money to be made in buying and selling financial contracts linked to
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case were reviewed and the major ethical issues involved in Enron’s scandal were analyzed. The rest of the paper is organized as follows. The second part is a brief summary of what has happened in Enron. The third part described the role of Arthur Andersen (AA) in the Enron scandal. In the following parts the culture of Enron, the important people involved in this case, and also the major ethical issues about this scandal were analyzed. At last, the conclusion part discussed what we should do
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