I need some help with starting on the following assignment:
Judge the actions of these companies as legal and unethical, legal and ethical, illegal and ethical, or illegal and unethical?
Enron (now defunct)
Enron, once hailed as a shining example of corporate excellence, collapsed in late 2001 due to massive accounting fraud, which bilked employees and other small investors out of millions of dollars. Arthur Andersen, hired to audit Enron's accountings, participated in the scandal by masking the issues and shredding documents containing potential evidence.
The Clorox Company
In early 2008, Clorox introduced a line of 99% natural cleaning products called Green Works. This is the first such effort form a major consumer products company, and also the first time that the Sierra Club has endorsed a product line by allowing the use of its logo on the labels. In return, Clorox makes an annual contribution to the Sierra Club, the amount based on total Green Works sales.
In 2009 Toyota stonewalled for months before admitting to a defect in some of its most popular cars that appeared to cause fatal accidents due to unintended acceleration. Even after announcing a large-scale recall, Toyota waited five days before halting new sales on models affected by the recall. Some analysts believe that Toyota knew about the defects long before the problems began and opted to do nothing.
Enron's acts are both illegal and unethical. Committing accounting fraud is illegal. Deliberately bilking employees and small investors of millions of dollars is unethical. The actions of Arthur Anderson, shredding of evidence is illegal. The collusion between Arthur Anderson and Enron is unethical.
What is especially unethical about the entire Enron episode is that it used a fraud to become a shining example of corporate excellence. It showed higher profits than its competitors because it committed fraud. Enron has a duty to ensure that the investments of its employees and of its shareholders are safe. Instead, it misled its employees and compelled them to sell their shares at very low prices leading to large losses. Similarly, the shareholders of Enron were taken for a ride. They were misled by the management of Enron in such a way that the shareholders suffered large losses.
It is the duty of a public auditor to examine the books of accounts of Enron and give an objective report about the ...
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