According to Johnson (2012) leaders are powerful role models‚ and policies will have a little effect if leaders do not follow the rules they set. In Enron case‚ corruption and ethical misconduct were deeply embedded in their business culture where profitability was more important than ethics. In this paper‚ I will address the factors that had led to the development of the culture of profit before principle at Enron. Also‚ I will create my personal code of ethics that will guide me in my professional
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severe financial losses for the American people. These catastrophes could have been prevented if more stringent ethical safeguards were in place and enforced within the walls of the financial institutions. Millions of business transactions occur every day. These transactions‚ if not policed by local and federal authorities‚ have the potential to knock the American economic structure off balance. In the last decade‚ three note-worthy scandals have nearly destroyed the American financial business
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MBA Program FN5202: Advanced Corporate Finance Report: Enron accounting fraud In October 2001 it was revealed that reported financial condition of Enron Corporation was sustained substantially by institutionalized‚ systematic‚ and creatively planned accounting fraud. Enron misrepresented its profits and was accused for a range of shady dealings‚ including concealing debts so they
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An Ethical Analysis of the Enron Scandal The Enron scandal is one that left a deep and ugly scar on the face of modern business. As a result of the scandal‚ thousands of people lost their jobs‚ some people lost their entire pensions‚ and all of the shareholders lost the money that they had invested in the corporation after it went bankrupt. I believe that Kenneth Lay‚ former Enron CEO‚ and Jeffrey Skilling behaved in an unethical manner without any form of justification‚ but the whistleblower‚ former
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Georgia Lazenby believes a current liability is a debt that can be expected to be paid in one year. Is Georgia correct? Explain. A current liability is a debt that can reasonably be expected to be paid a. from existing current assets or through the creation of other current liabilities b. or within one year or the operating cycle‚ whichever is longer 7. (a) What are long-term liabilities? Give two examples. (b) What is a bond? Long term liabilities are those liabilities which would
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notice that Special Purpose Entities should be carefully reviewed by each member of the auditing team. Even more after it was proven that most of Enron’s fraudulent accounting practices involved SPE. SPE allows companies to reduce their credit risk and lower the financial cost of investment. Shared-Based Payment A share based payment is a transaction in which a company obtains or receives goods or services as consideration for equity or by acquiring liabilities for amounts based on the price of
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Off Balance Sheet Financing Practices [Student Name] [Course Title] [Instructor Name] [Date] Off Balance Sheet Financing Practices The traditional accounting methods have been replaced by a number of new accounting techniques. Some of which are observable while other remain hidden. Off Balance Sheet Financing or OBSF is one of these new accounting techniques. It is a mode of obtaining finance for a business without disclosing significant capital expenditures on the balance sheet of a company
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not seem to display‚ which led to Enron’s operations file for bankruptcy in 2001. Enron’s scandal has become one of the most talked about forms of unethical business behaviors. The company’s collapse resulted from the disclosure that it had reported false profits‚ used accounting methods that failed to follow generally accepted procedures. Both internal and external controls failed to detect the financial losses disguised as profits for a number of years. Enron’s managers and executives retired or
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products that consumers have faith in and have confidence that they are getting the best deal with no hidden inconveniences. The Markkula article gives five examples of ethical decision that each business should take into consideration when making transactions with customers or implementing a product into the market. The utilitarian approach‚ virtue approach‚ rights approach‚ fairness approach‚ and common good approach are all steps the business should use to make sure their brand is ethical. Companies
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cause for Enron’s bankruptcy should be blamed on former chairman and CEO‚ Kenneth Lay. As an Enron executive‚ all of Lay’s concerns should have been focused on Enron’s profits‚ but all he cared about was his property. When he noticed Enron’s financial problem‚ he did not attempt to fix it‚ but made effort to maintain his own benefit and ignored the whole company’s and investors’ loss. His selfish and unethical behavior not only deceived the investors but also finally resulted in Enron’s bankruptcy
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