Ethics Article Review

Ethical and moral values provide a foundation to society on how to function, live, and work within the society. Determining the degree to which business has complier with established standards has presented a real problem. As seen through corporate corruptions such as Enron, without an ethical foundation, organizations collapse. In the article "Accounting issues at Enron", Reinstein and Weirich (2002) stated that "many executives at Enron and Andersen focused on the "letter of the law" rather than on whether the proposed accounting appeared ethical and fair" Indeed, the purpose of ethics in business is to direct individuals to abide by code of conduct that help increase and maintain public confidence in their products and services.

Enron was the seventh largest company in America and one of the world's largest energy, commodities and Services Company. Before its bankruptcy, it marketed electricity and natural gas, delivered energy and other physical commodities, and provided financial and risk management services to customers worldwide.

English: Enron Complex in Houston Texas

English: Minute Maid Park (Enron Field) was built ...

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Based in Houston, Texas, Enron was formed in 1985 by the merger of Houston Natural Gas and InterNorth. At one time Enron appears to have been a successful and innovative enterprise, principally engaged in trading and dealing in energy-related contracts. At some point it expanded by making substantial investments in a variety of business areas such as water, international energy brokerage, and broadband communications. Although some of these were initially successful, others resulted in Enron incurring large economic losses. The Enron appears to have embarked on covering up losses and manufacturing earnings. This succeeded for a time, but was ultimately unsustainable. These efforts allowed Enron to disguise the losses and not report debt for which it was contingently liable. Enron used Special Purpose Entities appropriately by placing nonenergy-related business into separate legal entities. (Reinstein & Weirich, 2002) What...