Analyse the corporate culture at Enron, Arthur Andersen and Lehman Brothers and discuss any similarities / differences, and the link between corporate culture, greed and fraud. Provide specific examples to justify your answer. In essence, for the three companies considered, as a corporate culture…”Greed is good”. The original virtues of Enron, Arthur Andersen and Lehman Brothers were all, over time, replaced by those three simple words…”Greed is Good”, and the damage that motto caused on Wall Street and across the globe was, is, and will probably be again, phenomenal. Deregulation of the financial services industry provided the key to unlocking the gates to a corrupt corporate world filled with greed and disastrous levels of fraud.
The inflated figures in their balance sheet shot up their stock price to unprecedented levels, taking advantage of the situation executives with insider information traded in millions of dollars of Enron stocks. The senior executives and insiders were aware of the offshore accounts that were covering up losses for the Organization; the investors were kept in the dark. This sent across a domino effect which resulted in shareholders losing seventy four billion dollars, loss of hundreds of jobs and thousands of investors and employees losing their retirement accounts. “Enron incorporated “mark-to-market accounting” for the energy trading business in the mid-1990s and used it on a huge scale for its trading transactions. These rules, when companies have outstanding energy-related or other derivative contracts (either assets or liabilities) on their balance sheets at the end of a particular financial quarter must be adjusted to fair market value, declaring unrealized gains or losses to the Balance Sheet of the period” (C. William Thomas, 2002).
This act covered many important issues such as auditor independence, enhanced corporate disclosure, corporate and criminal board accountability, corporate... ... middle of paper ... ...f the economy. If there are fewer scandals there will be higher growth in the economy. Section 802 of the Sarbanes-Oxley Act regulates companies from getting involved in any kind of unethical work. In my opinion, the Sarbanes-Oxley Act was a positive step taken by the government in order to control unethical practices by the corporations. Section 802 of the Sarbanes-Oxley Act is the most important sections of all the sections as it punishes the corporations who try to alter documents.
Michael Moore made the movie Capitalism: A Love Story to show his audience that because of all of these big banks and large corporations, we are in this huge economic mess. He goes directly to the people affected by this crisis to try and get his point across. Two of the main unethical acts done by these large corporations, according to Michael Moore, are taking out life insurance on employees and infiltrating our government to pass there own agenda. Then Moore goes on to talk about FDR's proposed bill of rights to help the average working American. All of these things come together to create Moore's movie and help him prove his point.
The Great Depression affected millions of people. No one could escape its severity. It grasped onto America and refused to release its hold. Some of the most influential men in America tried to relinquish some of its asperity but to no avail. America was sunk in an economic crisis that would cost billions of dollars and many lives.
Enron went to great lengths to try and fake it's income. “When Jeffrey Skilling, a key player in this scandal, was hired, he developed a staff of executives that, by the use of accounting loopholes, special purpose entities, and poor financial reporting, were able to hide billions of dollars in debt from failed deals and projects. Chief Financial Officer (CFO) Andrew Fastow and other executives not only misled Enron's board of directors and audit committee on high risk accounting practices, but also pressured Arthur Andersen, which was one of the five largest audit and accountancy partnerships in the world, to ignore the issues” Enron kept finding different ways to hide their debt. They used an accounting method called mark-to-market accounting. This accounting method is based on market value, which was then inflated.
Whenever someone hears the word "Enron" today, they usually think of the transgressions committed by the top-level executives who successfully managed to destroy the company's reputation and achievements. Actually, the company has been in business for more than 20 years and was once well known for being one of the premier American energy corporations . The key to its inevitable downfall was greed. A group of Enron management made the decision to put their own personal desires for wealth and power ahead of the company, its employees, and the thousands of investors who trusted in the stocks they held. How did they do it?
Not only were thousands of people out of a job, everybody lost their pensions, investments, everything. People that were millionaires in Enron stock now struggle to get by. The man who knew when to get out was Lou Pai. He joined Enron in 1987. His job was to turn Enron Energy Services into the biggest trading firm in the business.
The Enron Corporation was one of the world’s largest natural gas and electricity companies in the world before the bankruptcy in 2001. The Enron Company was doing excellent in stock before the huge scandal. In 2001 the company started to suffer, huge amounts of losses and their stock prices crashed. There was many people involved in the scandal, one of the main people involved was David Duncan the main accountant. David Duncan was an employee at the Arthur Anderson Company for over 20 years and started working at Enron since 1997.
Introduction If corporate America learned anything in 2001, it was that looks can be deceiving- and also financial statements. In early 2001, Enron was highly regarded as one of the most competitive energy companies in its sector. By December of 2001, Enron collapsed; filing for bankruptcy and eventually losing it’s investors over sixty-three billion dollars, and not to mention the loss of thousands of employee pensions and/or 401 K. This gigantic fallout of Enron was a result of a series of fraudulent transactions stemming to falsifying financial documentation. Unfortunately for the US public and investors, Enron was not acting alone; many companies were found to taking part in similar fraudulent activity. The result of evident Corporate Fraud in America was devastating to the economy.