Unethical Practices that Caused the Downfall of Enron.
Enron’s collapse was the result of countless unethical practices. Enron began with their CEO Kenneth Lay. The name Enron in North America is now a synonym with green and excessive profit by whichever means possible to do so. Enron started out as a natural gas company put together by Kenneth Lay.
ENRON The Downfall of Enron Introduction In recent months, the well publicised collapse of Enron has dominated the international financial news. The impact that Enron has had on both the accounting and business world will be long lasting and there is a need for an accounting shake-up.
Unethical Practices that Caused the Downfall of Enron. Enron, once the seventh largest company in the United States of America according to the Fortune 500, is one of the best examples today as how greed and desire for success in business can transform one into unethical behaviorism.
Greed caused the downfall of both the corporation by developing a system where no one was actually looking out for the good of the company. The hunger fueled executives to make decisions in their own personal interest, at the sacrifice of the company, which led to the Enron collapse.
The role of the accounting professionals in the downfall of Enron cannot be overlooked. The transactions and accounting issues of Enron especially the SPEs (Special Purpose Entities which Enron used to fund the risks generated from specific assets) became the core of investigations after the case was disclosed.
Downfall of Enron Free Essay, Term Paper and Book Report The downfall of Enron Corporation is one of the most infamous and shocking events in financial world in the whole history of the mankind, and its reverberations were felt on global scale.
Enron company was established in the year 1985, after the merging between Houston Natural Gas co. and InterNorth Inc. After this merge, the CEO of Houston Natural Gas hastily rebranded Enron company into an energy trader and supplier. Enron corporation became successful initially, but had quite a drastic and quick downfall.
Enron: The Smartest Guys in the Room puts the key focus on them with the help of recording, archive reports and interviews with many leading economic experts counting McLean and former Enron workers. The smart guys at Enron were, in fact, clever but amoral enough to profit from those conditions.
Enron scandal actually grew out of steady habits accumulation. Skilling on his part relentlessly focused on meeting the expectations of Wall Street, pressured the executives in the company to discover new ways of hiding its debts, and advocated mark to market accounting use, which is the accounting that is based on the market value that was at.
Enron is Synonymous with Ethical Failure. Given that Enron’s code of ethics was inclined towards the good ethical conduct of all its cooperate employees, it failed and was declared bankrupt in 2001 (Fusaro and Miller, 2002). The failure of the Enron can be attributed to the failure of the executive and the unethical behavior within the company.
That which happened with the demise of Enron was an eye opener for everybody. One would like to think that the financial institutions, broker firms, organizations and the government have their best interest at heart, but that is not always the case.
Enron was founded in 1985 by Kenneth Lay in the merger of two natural-gas-transmission companies, Houston Natural Gas Corporation and InterNorth, Inc.; the merged company, HNG InterNorth, was renamed Enron in 1986. After the U.S. Congress adopted a series of laws to deregulate the sale of natural gas in the early 1990s, the company lost its exclusive right to operate its pipelines.
Since the downfall of Enron is generally attributed to “a botched expansion attempt, an accounting scandal, and the overweening ambition of its once widely admired top executives”, it is best to examine these particular areas (Bloomberg, 2001). The immediate contributing factor to the downturn of Enron was their failure in the area of energy.
