The Failures Of The Enron Scandal Essay - 2042 Words

It seems like business morals and ethics are being whisked to the side in lieu of the ever growing demand of higher stock prices, rising budget goals and investor profits. Despite the increased regulation of corporations through legislation, such as, Sarbanes-Oxley, some corporations still find themselves struggling to maintain ethics and codes of conduct within the workplace. In reviewing the failings of the Enron Scandal, one can heed the mistakes that both individual and organization malaise, such as, conflicts of interest, lack of true transparency and the sever lack of moral courage from the government, executive board, senior management and others, contributed to the energy giant’s downfall. Beyond the Dreams of Avarice A key factor to Enron’s fall from grace, was due to the foibles of its corporate leadership, in particular, how certain executives were willing to overlook unethical behavior in lieu of profits. For example, Ken Lay, Enron’s Chairman, espoused the ideals that Enron had higher level of morals than the average company (Gibney, 2005). However, on several instances, he failed to enforce or show that level of commitment. In the Vahalla case, he allowed traders that were involved in manipulating and gambling the company’s earnings to continue their operations, despite being warned of their fraudulent behavior (Gibney, 2005). His justification, at the time, was that Vahalla was the only part of the company that was making any money (Gibney, 2005).Show MoreRelatedFailure And Fraud Of Enron1161 Words   |  5 Pagesdiffering characteristics such as failure and fraud that have been linked through time. However, although failure and fraud are connected in several vario us ways, one tends to come before the other. Generally failure is the absence of achieving success and fraud is committing an unlawful act that is driven by failure or to result in failure. Failure has driven fraud for countless reasons either for financial prosperity or personal supremacy. In many cases the direction of failure and fraud is mainly subjectedRead MoreJaclyn Givens. Kathy Osburn. Management 101. 5/8/17. The1400 Words   |  6 PagesJaclyn Givens Kathy Osburn Management 101 5/8/17 The Enron Era â€Å"Just as character matters in people, it matters in organizations,† says Justin Schultz, a corporate psychologist in Denver. The Enron scandal had a big exposure in 2001 confirming the big secret to the increase in billions. In July 1985, Enron formed the merger of Houston Natural Gas and Omaha-based Inter North. The Enron corporation was an American energy company based in Houston Texas. The corporation’s catastrophe in 2001 signifiesRead MoreEnron Essay1433 Words   |  6 Pagesthe Causes and Effects of the Enron Accounting Scandals Name: Do Minh Tam Class: MEP 100 Lecture: Karen Bird Date: December 24, 2010 Introduction Background From the 1980s until now, there have been a lot of accounting scandals which were widely announced on by media. The result of this situation is many companies were bankruptcy protection requests, and closing. One of the most widely reported emulation of accounting scandals is Enron Company. Enron Corporation is one of the largestRead MoreEnrons Business Failure Paper986 Words   |  4 PagesEnron Business Failure Paper Abstract The following paper will explain the reason of why Enron as a company failed. It will compare and contrast the contributions of leadership, management and organizational structures to the failure. Enron, was the worlds top electrical, communications, pulp and paper, and natural gas company. 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The Enron Corporation is an example, because Enron event is the typical case for organization failure of responsible management In the end of 2001, Enron scandal has been disclosure, Enron stock prices slumped, and its financial tricks was exposed. The Securities and Exchange Commission (SEC) began survey of company s records. Enron’s auditor ‘Arthur Andersen ‘destroys relevant documents. (Ailon, G. 2011) Enron was bankruptcy in DecemberRead MoreEnron Corporation : The Enron Scandal Essay1172 Words   |  5 PagesThe Enron Scandal The objective of an audit is to â€Å"obtain reasonable assurance† of the credibility of the financial statements of a company . However, in some cases auditors can fail to recognize – or intentionally ignore – misleading data within a company’s financial statements, leading to negative outcomes for lenders and investors. This report will discuss the Enron scandal in which the auditing firm Arthur Andersen LLP turned a blind eye to the fraudulent actions of Enron Corporation, leadingRead MoreThe Fall Of Major Telecommunications Company Onetel And Enron1319 Words   |  6 Pages OneTel and Enron were huge technology companies, dominating the competition that they faced although - everything changed. Both of these companies operated in the same era, coincedently both suffering financial collapse. The reasons were mainly because of failure to follow major accounting principles, lacking morals and lacking strong work ethics. If even a major corporation can fall into this â€Å"trap†, then avoiding doesn’t sound easy, although accountants can easily avoid scandals by following aRead MoreEvents Leading Up to the The Sarbanes-Oxley Act Essay examples1203 Words   |  5 Pagescorporate and accounting scandals including those affecting Enron, Tyco internationals, Adelphia, Peregrine Systems, and WorldCom. The Securities Exchange Commission (SEC) adopted many rules in order to implement the Sarbanes-Oxley Act. The Enron Scandal escalated distrust amongst the shareholders, employees and government agencies. Thus, as a result the Sarbanes-Oxley Act was passed to protect the interest of all affecting parties. The Act is nearly a mirror image of Enron: the companys perceivedRead MoreCorporate Culture Of Enron And Bankruptcy1327 Words   |  6 PagesIntroduction The case study is about Enron and about their biggest failure that lead the company towards bankruptcy. Enron got bankrupt to the extent that was no point of returning back and reversing its wrong doings. The only thing that the company had to think about was how to return the losses of its creditors. Enron Corp. was left with $12 billion in assets which was to be distributed among more than 20,000 creditors. Around 80% of creditors of Enron backed the long-awaited reorganization plan