Enron Scandal Analysis Essay

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Ethics is a system of moral principles. The society depends on ethics from people, companies and the government in order for a civilized world. What happens when an unethical behavior is done? What if it is done by a large corporation, large enough to hurt the economy? The Enron scandal is an example of a historical exposure of unethical behaviors within a company and it is also one of the largest corporate scandals in America. Enron started as a gas pipeline company.

It soon expanded into the world’s largest and dominant corporation focusing on trading gas, electricity and water – the most essential needs of a citizen living in North America. In December of 2001 Enron filed for bankruptcy. The moral concern from this scandal was the immoral practices that Enron acted upon from the pressure of potential bankruptcy and mere greed for more profit. Enron ; being the ambitious company and profit hungry corporation expanded into new areas besides gas pipelines at an alarming rate. This was the initiating mistake; Enron bit too much that it could chew.

Many of the markets it established did not work. One of the largest contributions towards bankruptcy was due to the wrong doings of the accountants. The Bookeepers wrote false statements about the profits, the losses and charges that Enron had received. Enron partnered up with one of the largest accounting firms in North America. At that time which was Arthur Anderson Inc. After much investigation it was revealed that Arthur Anderson Inc, had hidden all different kinds of losses.

, Anderson had shredded documents and erased computer files about the accounting at Enron. Its vaunted cash flow came from spurious accounting.It would sell a subsidiary that was losing money to another company – a shell company which Enron set up, owned and financed. That way, the losses were erased from Enron’s balance sheet, and in their place was a ‘cash inflow’ from the shell company Enron had created. (The balance sheets never indicated that Enron had lent this money to the shell company in the first place, that it was repaying itself and counting the repayment as income.

) Equally corrupt was Enron’s practice of booking the entirety of energy transactions as capitalization, rather than the amount of money Enron made from the sale.Anderson was making as much money from consulting for Enron as it was for auditing its books, for a total of $52 million in fees last year.. Investors began to have second thoughts about Enron, whose stock, having reached a high of 98 dollars a share, plummeted. Suddenly Enron found itself in a huge credit crunch, and the corporation imploded.

It turned out that many Enron executives had sold tens of millions of dollars of their stock while the public went on buying shares in the company, assured by these same executives that all was well.Worse, Enron executives had authorized a change in the company’s pension plan that froze workers’ retirement funds in Enron stock as the price nose-dived. While executives sold their stock, the workers woke up to find that their pension plan was worthless. Enron also invest a lot of money into politics. For instance he invested The Republican Party, which had the responsibility in the recent past of passing legislation that would ease Enron’s path into the shady side of business, received $1.

million in the 2000 election. The Democratic Party, which under President Clinton had supervised the laws and policies that Enron often wanted changed so that it could flourish, received $500,000. Mr Bush received $113,800 from Enron. Since Enron invested so much in politics they were allowed to have favours from politics such as getting the Federal energy Regulatory Commissioner fired because the Enron did not like the regulations that they put on energy and electricity.

Being close with the politicians also meant not paying income taxes for five years. Whistleblower named enron executive Baxter as a key player who spoke out against ENRON’s use of the LJM partnership to conceal hundreds of millions of dollars in debt. He was found dead considered a suicidal attempt by the Enron executive. This shows the corruption also on a moral human basis. The moral concern is the unethical practices of this large corporation. In desperate times for money, the company decided to do unethical things.

Many things that they did was against the law. They found a way through these things because they were a wealthy and powerful corporation. Not only that but they also had connections to powerful people in politics and also to other businesses. Not only were these unethical issues but this also impacted the economy at a larger scale.

The loss of jobs and These were morally wrong. The doings of greed and . In this case the government was also involved. The issues that are faced here is the issue of

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