Where do you think Enron failed in its ethics and social responsibility toward its stakeholders? What according to you should be the top three points for the ethics and social responsibility policy for Enron to avoid the recurrence of the breakdown of ethical standards in Enron?
According to Wikipedia.org (2010) the Enron scandal revealed in October 2001, eventually led to the bankruptcy of the Enron Corporation, an American energy company based in Houston, Texas, and the dissolution of Arthur Andersen, which was one of the five largest audit and accountancy partnerships in the world; in addition to being the largest bankruptcy reorganization in American history at that time, Enron undoubtedly is the biggest audit failure. According to this site, Enron was formed in 1985 by Kenneth Lay after merging Houston Natural Gas and InterNorth; several years later, when Jeffrey Skilling was hired, he developed a staff of executives that, through the use of accounting loopholes, special purpose entities, and poor financial reporting were able to hide billions in debt from failed deals and projects; Chief Financial Officer Andrew Fastow and other executives were able to mislead Enron's board of directors and audit committee of high-risk accounting issues as well as pressure Andersen Accounting to ignore the issues.
According to Wikipedia (2010) Enron's stock price, which hit a high of US $90 per share in mid-2000, caused shareholders to lose nearly $11 billion when it plummeted to less than $1 by the end of November 2001? According to these authors, the US Securities and Exchange Commission (SEC) began an investigation, and the corporation Dynegy offered to purchase the company a fair sale price. When the deal fell ...
This essay describes the unethical plight of Enron and how and what happened that caused shareholderes to lose nearly $11 billion. The essay also examines the consequences of the scandal in which new regulations and legislation were enacted to expand the reliability of financial reporting for public companies.