Enron corporation, energy and services company, was a major player in a former industry where the rules were not as transparent nor as stern as they are today. Relaxed GAAP (Generally Accepted Accounting Principles) and business laws paved the way for numerous unethical business professionals to maximize their profits with extreme disregard for corporate social responsibility towards their stakeholders, environment, and the American community. Enron’s unethical practice of utilitarianism and profit maximization contributed greatly to the development and the implementation of the Sarbanes-Oxley Act, which raised consequences for unethical corporate violators, while also establishing rules to enforce ethical and social responsibility. Senior management now must monitor the accuracy of financial statements provided by corporations. The act also enforced the storing and backup of all financial records as well as the IT department’s responsibility in a corporation to reserve all other records and electronical transactions (Investopedia Staff, 2018). Together, we will examine how it took years for the scandal to expand, and days for its collapse and bankruptcy. Enron at one point claimed more than $60 billion in assets through their bookkeeping efforts. The US government legislators were forced to create statutes that regulated accounting standards following the exposure of repugnant unethical behavior. Alternative measures such as the inclusion of moral values, greater examples of ethical behavior and its necessity should have been set, and disparagingly greater transparency displayed by Enron would have ensured the safety of the stakeholders. Unethical and greedy decision making left a black mark on America’s business culture and society.
Source:
Staff, Investopedia (2018, August 15). Sarbanes-Oxley Act Of 2002 – SOX. Retrieved September 25, 2018
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Visionary Writing 