Case Study Of Enron's Code Of Ethics

Auditors’ motivated blindness. It could be that this conflict of interest is the reason behind Arthur Anderson issuance of an unqualified audit report without questioning or recommending to the audit committee the treatment of the related party transactions (Tonge et al., 2003, p. 15), the appropriate disclosures to make or the reasonable assumptions of mark-to market accounting. Moreover, Andersen admitted it destroyed perhaps thousands of documents and electronic files related to the engagement, in accordance with “firm policy,” supposedly before the SEC issued a subpoena for them (Thomas, 2002).
Counterculture. Not only the auditors were responsible for Enron’s disaster. Enron was actually the dream of a lot of employees to join, as it incorporated a culture of hiring the best and brightest traders instituting the harshest employee-ranking system in the country, the

2135) and therefore, the less stringent the code of ethics is, the less information it will contain and the less waiver disclosures it will be required to make. Companies may choose to have a very narrow code that doesn’t elaborate on the details, just to meet the minimum requirements by law and to avoid any legal liability of non-compliance with disclosure requirements. Doing that means going in the opposite way of achieving the law transparency goal (HLR, 2003, p. 2141). Therefore, a review to this specific rule and amending it may resolve this conflict. However, I believe that the original problem is the non-existence of a uniform code of ethics for public companies; further research is needed to determine the possibility of having a universal code of ethics that govern the actions of American public