Enron - Were they the Crookedest Guys in the Room? The Rise of the Big "E" In May 1985, InterNorth Incorporated and Houston Natural Gas announced that they would merge. Their combined value was an estimated $2.3 billion. These firms were two of the largest gas pipeline companies in the United States. As part of the negotiations, the chairman and CEO of InterNorth, Sam Segnar, would be the head of the new entity until January 1, 1987, when the chairman and CEO of Houston Natural Gas, Kenneth
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into loans that they cannot realistically afford. Trevino and Nelson define “ethical behavior in business as “behavior that is consistent with the principles, norms and standards of business practice that have been agreed upon by society” (p. 19). Many standards and policies were translated into laws, but there are also some behaviors that cross into the ethics realm not considered illegal. Also, some behaviors illegal in the United States, but they may not be recognized as illegal in other countries
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accounting with emphasis on the need of ethics; the methodology used is purely content analysis, using secondary data. The study reveals that unethical behavior is less prevalence in the organization that has adopted corporate code of ethics. Therefore, it is recommends that corporation without formal code of ethics should adopt it in order to mitigate the unethical behavior while users of financial report should possess analytical ability in order to have a better understanding of financial information and
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When Charles Ponzi came to America from Italy in the 1920s, not even he could have thought that his name would become the word to describe a swindler, a huckster, and a crook. Many Ponzi schemes, including the Bernie Madoff one, have resulted in untold investor losses, murders, and suicides. It also fanned the flames of mistrust amongst everyday investors, who will never invest in the stock markets again. The paradox in this is that these investors will be at the beck and call of the banks, pushing
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would argue that it is perfectly fine to manage earnings, as long as it is within the generally accepted accounting principles. Others would argue that managing earnings is unethical from any standpoint. Furthermore, some would find it okay to manage earnings if it were in the best interest of shareholders, but find it is unethical if interest lied in the hands of the manager’s wealth. It is clear that there is a fine line between what
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pockets use illegal actions. In recent times, companies such as Enron, Wal-Mart and BP have been guilty of multiple charges against ethical principles which have led to bankruptcies, housing market crashes and environmental disasters. The most famous case related to Enron and their aggressive accounting practices of reporting losses as profits to keep the stock price high. This act ultimately led to the bankruptcy of the company. Enron was founded in Omaha, Nebraska by Kenneth Lay in 1985. It was
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Running Head: PROFESSIONAL VALUES AND ETHICS Professional Values and Ethics University of Phoenix Gen/200 Foundations for General Education and Professional Success Instructor: Christopher Mott Professional Values and Ethics Values and ethics are extremely profound attributes, and very significant when instilled within a person of determination. In knowing the desire and need to be successful, the driven nature within can empower energy, magnified by the continued success of one’s
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embezzlement from union funds, bribery and mail fraud. RICO made it easier to prosecute corrupt organizations and seize assets related to corruption. When Enron and similar scandals broke out in the early 2000s, Congress took action. It passed the Sarbanes-Oxley Act Sarbanes-Oxley Act (SOX) in 2002 to reduce unethical corporate behavior and decrease the likelihood of future corporate scandals (Kimmel, Weygandt & Kieso 2011). As a result of SOX, penalties for fraudulent financial activity are
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Meteoric Rise and Fall of Enron Enron was created in 1985 after a merger between Houston Natural Gas and Internorth. By 2002 it was gone forever. Its stock price rose to $90/share in August of 2000 before bottoming out at $0.40/share when they filed for bankruptcy on Dec. 2nd 2001. It only took 16 years for one of the largest Fortune 500 companies to completely dissolve, taking employee jobs, pensions, Arthur Andersen, and the American public’s faith with it. Enron and its young McKinsey consultant
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Ethics a Fading Value Ethics the study of standards of right and wrong; that part of science and philosophy dealing with moral conduct to duty and judgment formal or professional rules of right and wrong; system of conduct or behavior. In today’s society, private, professional, religious and in general, the question to have or not to have a recognized and agreed upon set of ethics is in dispute. Every professional, private, religious, and government entity has in one way or another been called
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