The Ethics Of The Enron Case - 1622 Words

Introduction The Enron case is well known for being the largest corporate bankruptcy in American history. Thousands of people world-wide lost billions of dollars, lost life savings, and lost their jobs. Due to the vast corruption, greed and the blatant disregard for integrity from the very top of Enron leadership, world markets crumbled and investor confidence in corporate America was severely damaged (Chandra, 2003.) We will look at the accounting fraud committed by Enron executives and interested parties. We will run their accounting tactics through the Utility Ethics test to determine if there were alternative actions that would have been considered ethical as determined by the test. Introduction of the Test Were the accounting†¦show more content†¦Under the theory, Enron power broker actions (deceptive accounting, manipulating accounting numbers, keeping two sets of accounting books, etc.) are not the driving factors in determining good or bad for the group. It is the outcome or by product as a result of the actions that are to be considered (Velasquez, et al, 1989). The bottom line is: if more good than bad is the result for the most people then the behavior will be considered as ethical. STEP 1: Alternative actions and the Enron stakeholders affected by these actions The choices are Course of Action (COA) 1, Enron leaders follow time tested, trusted, and ethical accounting practices or Course of Action (COA) 2, Enron leaders put aside professional ethics for personal economic gain. The stakeholders are many. Ken Lay, Jeff Skilling, Andrew Fastow, other high level executives, board of trustees, Enron employees, outside partnerships to include foreign countries, investors, and the accounting firm Arthur Anderson and its thousands of employees. The stakeholders are in the tens of thousands and maybe exceeding 100,000 thousand people. STEP 2: COA 1 and COA 2 benefits and costs to each person or group affected. We will first consider COA 1. Enron at one time was a great company that hired good people that believed in doing things right, and they were known for being a model corporation. In fact in 1999 Enron was named by Fortune as America s Most