Ethics

One of the tragic events that happened in business was the Enron Scandal of 2001. This scandal involved fraudulent corporate practices such as accounting fraud, which led to the biggest bankruptcy case at the time (Fox, 2013). The company executives misrepresented its earnings so that its balance sheets appeared favourable yet the firm was underperforming.  Enron corporation subsequently filed for bankruptcy, and the fact that it had assets of over $63 billion, made it the largest corporate bankruptcy at the time. Enron shareholders and employees faced massive losses after the company stopped operating and the US developed stronger financial regulations to prevent similar corporate unethical practices in future. 

After the Enron scandal was publicized, the US Securities and Exchange Commission (SEC) began an investigation. The first response by the state and federal agencies following the event was investigating and charging perpetrators of the crimes (Kimmel et al., 2011). This move was meant to deter similar actions by executives in future through punishing criminal behavior. As a result, several executives were charged and later imprisoned for their role in the scandal. The second step was the development of long term strategies that will prevent future corporate scandals of a massive scale such as Enron. To achieve this goal, legislators passed the 2002 Sarbanes-Oxley Act which outlined actions by management, public company boards and public accounting firms that sought to protect investors and other stakeholders from corporate fraud (Kimmel et al., 2011). The act enhances transparency in the disclosure of financial information by corporations and it enforces stiffer punishment for violations in ethical responsibility. 

Don't use plagiarized sources. Get Your Custom Essay on
Ethics
Just from $13/Page
Order Essay

The management and executives of a corporation are directly accountable to stakeholders, and are expected to run the company while safeguarding the interests of shareholders.  These executives should observe social responsibility, integrity and business ethics while operating. Social responsibility is the concept that companies should perform their activities in a manner that is beneficial to society at large. It entails addressing the welfare of different segments in society such as local communities and marginalized populations (Fox, 2013). Integrity is the ability to have strong moral principles and being honest in one’s undertakings. Business ethics entails following ethical principles that guide business operations such as integrity, responsibility, accountability, transparency and prudence. 

Executives at Enron failed in their ethical duty to stakeholders by breaching values such as transparency, integrity, and accountability. The Enron management deliberately misrepresented the company’s financial performance by altering its financial statements to portray positive performance. The executives also failed in their social responsibility since they performed actions that harmed society (Fox, 2013). Many people were jobless after the collapse of Enron, and this had significant adverse effects on society. Additionally, many social programs that Enron supported through its corporate social responsibility programs also collapsed.  The actions by the executives were unethical and outright criminal.  

In conclusion, the Enron scandal shaped the ethical culture in the United States by exposing how unethical practices by corporations can be detrimental to the economy and society.  It influenced the development of stronger regulation of corporate practices through the 2002 Sarbanes-Oxley Act and other regulatory measures. Moreover, executives have an ethical duty to observe principles such as integrity, transparency and accountability in their duty so that they act in the best interests of shareholders. Enron management failed in this role and most of the executives who were culpable were indicted and jailed for their offences. It is important for corporations to develop a culture of integrity and social responsibility so that they can ultimately attain their goals. 

References

Fox, L. (2013). Enron: The Rise and Fall. New York: John Wiley & Sons

Kimmel, P. D., Weygandt, J. J. & Kieso, D. E. (2011). Financial Accounting, 6th Edition. 

New York: Wiley.

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Confidentiality Guarantee

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

24/7 Support

Our specialists are always online to help you! We are available 24/7 via live chat, WhatsApp, and phone to answer questions, correct mistakes, or just address your academic fears.

See our T&Cs
Live Chat+1(978) 822-0999EmailWhatsApp

Order your essay today and save 30% with the discount code ESSAYHELP