This paper reviews one of the most famous scandals in the accounting history i.e. Enron Scandal. Different aspects of this scandal are highlighted and discussed in this paper.
1. Given the corporate ethical breaches in recent times, assess whether or not you believe that the current business and regulatory environment is more conducive to ethical behavior. Provide support for your answer.
The year 2002 saw the corporate scandals increase and this catapulted the people’s distrust in corporate leaders. Furthermore there was no change in the level of improvement in public policy. There was also no significant change in public policy. Some futurists believe that it will require the likes of a very monstrous crisis situation, such as the emergence of a major depression or a vast breakdown in regulation to arise the general public from its doped state of consciousness.
The Scandal of Enron had raised the issue of regulation for financial institutions. It was evident now that Investment banks can earn far more money in process of under writing as compare to relying only on broker fees. Therefore it had been a conflicting situation for the employees to either make happy their employers or executives by showing them profitable results in reports or picturing the true image in front of investors.
2. Based on your research, describe the organization, the accounting ethical breach and the impact to the organization related to ethical breach.
The Enron scandal is one of the most memorable scandals in American history. It is a symbol of excessive fraud and unethical practices for the world. Enron scandal raised the issue of compliance, risk management and ethics on a larger scale. The auditor, Arthur Anderson was accused for forming partnerships off-the-books in order to hide the debt burden, increasing executive’s capital, destroying the relevant official documents and breaching the trust of its employees. The total loss to...