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Managerial Ethics: The Case of Enron The recor

Managerial Ethics: The Case of Enron

The record bankruptcy of giant energy firm Enron was a landmark failure of corporate governance, a failure shared by corporate officers, the Arthur Andersen auditing firm responsible for verifying the accuracy of Enron's financial statements, and ultimately of the governmental regulatory agencies that are charged with ensuring that corporations report financial data in an appropriate manner (Enron a case studyà, 2002). Altogether, Enron shareholders and its employees' retirement accounts lost more than $75 billion; additionally, revelations of fiduciary malfeasance included information regarding multimillion-dollar profits realized by the firm's Chief Financial Officer via management of several limited partnerships and substantial sums paid out to family members of the Chief Executive Officer (Verschoor, 2002). Overall, in the opinion of this writer, examining the case of Enron from an ethical perspective is necessary to first identify "what went wrong" and second to determine what must be done to prevent similar cases from occurring in the future.

The research hypothesis to be explored herein via a qualitative, narrative study methodology is stated as: Enron's ethical failure was based in part on a deliberate failure to follow the rules of accounting and auditing practices that govern corporate financial reporting and in part on the fact that some of Enron's actions were essentially legal, if not either sensible or ethical. Indeed, Mark A. Sargent (2002, p. 10) stated that this was the case, noting that despite government regulations functioning as restraints,

These restraints did not work because much of what

Enron and the people around it did was either completely or arguably legal, and the watchdogs involved with Enron û its accountants, lawyers, and independent directors û allowed the company to push itself to the very limits of legality.

While, therefore, it has becom...

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Managerial Ethics: The Case of Enron The recor. (1969, December 31). In LotsofEssays.com. Retrieved 06:23, March 28, 2024, from https://www.lotsofessays.com/viewpaper/1704486.html