Ethical Ethics Of Enron

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CEO Kenneth Lay’s ambition for ENRON a company he had helped form went beyond the business of piping gas. Enron went to become the largest natural gas merchant in North America and the United Kingdom. But the reality is, this company business model never worked. This was a company that was so desperate to win Wall Street 's respect that it kept it stocks shares prices going up despite the losses it was incurring in order for executives to keep lining their own pockets. Over the course of this Case Assignment, I will identify the examples of financial reporting misconduct, I will explain the deontological as well as a utilitarian ethical perspective and lastly I will identify the stakeholders likely to be affected by that misconduct. Enron …show more content…

Stock hit an all-time high of 90 dollars a share, the market valuation of 70 billion dollars, and was named in 2001 America 's Most Innovative Company by Fortune for six consecutive years between 1996 and 2001. As Enron expanded, there was little scrutiny of how it was managing the expansion; this allowed Kenneth Lay to completely misrepresented financial reality, Enron was participating in several serious financial reporting misconduct to include; “Creative accounting- allowed Enron to appear more powerful on paper than it really was. Special purpose entities – subsidiaries that have a single purpose and that did not need to be included in Enron 's balance sheet, balance sheet – were used to hide risky investment activities and financial losses. Forensic accounting later determined that many of Enron 's recorded assets and profits were inflated, and in some cases, completely fraudulent and nonexistent. Some of the company 's debts and losses were recorded in offshore entities, remaining absent from Enron 's financial statements.” (Folger, 2011). Kenneth Lay and the senior leadership were more concern with the results vice the financial reality, they were willing to enforce unethically decisions to benefit the organization; decisions made by senior manager to mislead Wall Street 's may have been, in his opinion, as an ethically correct way to benefit the shareholders and stakeholders, by portraying to be financially strong. However, the consequences of this action did not benefit the organization as a whole instead it only benefited Jeff Skilling and senior

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