Management Articles- Ethics

Essay by salman1981 January 2010

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Article1Enron's Accounting Issues - What Can We Learn to Prevent Future Enron's is a prepared testimony by Bala G. Dharan, this article was presented in Journal of Corporate Accounting and Finance: Special Issue, Enron and its aim is to give into the minds of the listeners and readers an objective view of what really went wrong in Enron specifically in its accounting anomaly. It discusses terms and events and what could have been done to avoid what happened. It explicitly shows what Enron did that lead to its downfall.

The article is concentrated and aimed not to repeat the said case. It presents the loss of investor trust, the use of pro-forma earnings, special purpose entity accounting, and hiding of debt, hiding of poor-performing assets, earnings management, and quick execution of related party transactions at desired prices, mark-to-market accounting and recommendation to Enron's case.

The collapse of energy giant Enron is the largest bankruptcy and one of the most shocking failures in United States corporate history.

Enron lied about its profits and stands accused of a range of shady dealings. To disguise its true balance sheets, the firm used complex financial partnerships to conceal debts. And many of the company's executives allegedly ranked in massive profits, selling their own shares before the stock collapsed. Millions of dollars were allegedly funnelled to top executives, their families and selected friends, and into partnerships they controlled.

The Enron fiasco is a huge embarrassment to honest and hard working Americans. Those who have lost money in the stock market wonder, "who is in control?" The first thing which needs to be consider when such issues like is one is handled is campaign finance reform. This issue is a great example of poor ethics and cooperate responsibility of all professional services. From this example companies...