What Are The Ethical Issues In Enron

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Unethical Behavior Concerning Accounting Fraud: Enron Relevant Facts Enron was on the of the most successful and innovative companies throughout the 1990s. In October of 2001, Enron admitted that its income had been vastly overstated; and its equity value was actually a couple of billion dollars less than was stated on its income statement (The Fall of Enron, 2016). Enron was forced to declare bankruptcy on December 2, 2001. The primary reasons behind the scandal at Enron was the negligence of Enron’s auditing group Arthur Andersen who helped the company to continually perpetrate the fraud (The Fall of Enron, 2016). The Enron collapse had a huge effect on present accounting regulations and rules. Ethical Issues The main ethical issue with the Enron scandal is that Enron allowed legal loopholes to supersede ethical principles (Bowen & Heath, 2005). Enron used legal principles to justify what they were doing instead of acknowledging that the accounting processes they were using were unethical. Another one of the ethical issues is that Enron faced was that …show more content…

Egoism focuses on what is best for one’s self. The top executives may have followed this ethics system because they made millions of dollars off of the Enron scandal even though they knew what they were doing was wrong. Since they were doing what was best for them, they must have been acting ethically. It could also be argued that utilitarianism was at work in regards to the Enron scandal. Utilitarianism holds that an action is ethical if it does the greatest amount of good for the greatest number of people. The end justifies the means. By manipulating their statements, Enron was helping all of their employees and shareholders to keep their jobs and money. This justified and made their choice to lie on their statements the ethical decision to

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