Ethical Issues of the Enron Scandal A Potential Solution

Ethical Issues of the Enron Scandal: A potential solution Enrons entire scandal was based on a foundation of lies characterized by the most brazen and most unethical accounting and business practices that will forever have a place in the hall of scandals that have shamed American history. To the outside, Enron looked like a well run, innovative company. This was largely a result of self-created businesses or ventures that were made off the balance sheet. These side businesses would sell stock, reporting profits, but not reporting losses. Treating these businesses off the balance sheet meant that Enron pretended that these businesses were autonomous, separate firms. But, if the new business made money, Enron would report it as income. If the new business lost money or borrowed money, the losses and debt were not reported by Enron (mgmtguru.com). As the Management Guru website explains, these tactics were alls designed to make Enron look like a more profitable company and to give it a higher stock price. Unfortunately, scandals like Enron ar e not isolated incidents and the last decade has offered Americans a disheartening perspective with comparable scandals like that of WorldCom and Tyco, Sunbeam, Global Crossing and many more. Companies have a concrete responsibility not just to their investors but to society as a whole to have practices which deter corporate greed and looting and which actively and effectively work to prevent such things from happening. ThisShow MoreRelatedLegal And Regulatory Environments And Ethics1712 Words   |  7 Pagesattention should be paid on the ethical standards, corporate governance feature and codes of ethical conduct. 2. Title: The Press as a Watchdog for accounting fraud Press plays a major role in today world and almost each and every report is published in press. Therefore it is an essential source to publicize the information and to spread the information. However press is always in search for reports so they can publish it. Same thing happened in the accounting scandals where press plays a major roleRead MoreEthical Issues Faced By Enron Should Have Be Aware Of Certain Risk Factors1301 Words   |  6 PagesFacing Ethical Problems Head On Enron should have be aware of certain risk factors can lead to unethical behavior. Top management must adhere and emulate the highest ethical standards. In order to stop unethical behavior within an organization, there must be a way employees to discuss their experiences with someone outside the organization. This creates a firewall between employees and management where fear of retribution for their actions does not exist. 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This resulted in shareholders losing $74 billion, thousands of employees and investors losing their retirement accounts and many employees lost their jobs (Accounting-Degree.org, 2015). Crane and Matten (2010) argue â€Å"After all, despite many years of business ethics being researched and taught in colleges and universities, ethics problems persist and the public remains sceptical of the