Ethical values are essential to the progress of all individuals and of any nation. Ethical values are crucial to the functioning of all business in general and society as a whole. Business and society depend on individuals making personal ethical decisions that are fundamental to responsible business operations and to an orderly society. "The purpose of ethics in accounting and business is to direct business men and women to abide by a code of conduct that facilities public confidences in their product and services" (Dr. Smith, L Murphy). The accounting profession has a long history of contributions to the efficient functioning of business operations, the capital market system and the economy in general. In the wake of corporate scandals and a struggling world economy, we look back at the accounting scandal at Enron, from an ethical perspective, the company which the media portrayed was the last straw that broke the camel's back. Enron was a large energy, commodities and services company, marketing electricity and natural gas, and providing financial and risk management services around the world (Cunningham, Lawrence 2002). Enron Corporation was created in 1985, shortly after the federal deregulation of natural gas in North America. Enron was formed by the merger of two natural-gas pipeline companies, Houston Natural Gas, one based in Houston, and the other in Nebraska, InterNorth (Dobson, John 2002). The merged company owned 37,000 miles of intra- and interstate pipelines for transporting natural gas between producers and utilities. The complex industrial structure of Enron was vast and only understood by a few people outside of Enron at the time of its filing for bankruptcy in December 2001. There was no clear picture or complete information as to the true levels of its assets, liabilities and offbalance-sheet positions (Cornford, Andrew, 2002). This was a far cry from the firm which, in the 1980s, specialized in the provision of natural gas pipelines and related services (Cornford, Andrew, 2002). From these humble origins, Enron expanded relentlessly into trading activities in more 1,800 products or contracts and thirteen currencies which included bandwidth, pulp and paper, and contracts such as weather and credit derivatives (Cornford, Andrew, 2002). It was in connection with expansion into trading that Enron engaged in increasingly aggressive and creative accounting (Cornford, Andrew, 2002). The core of the Enron debacle are said to be accounting chicanery related to off-balance sheet financing, related party transactions and colossal failures of board oversight (Cunningham, Lawrence 2002). These accounting, corporate and auditing issues included the use of complex but apparently compliant accounting rules to mask or defer recognition of liabilities and losses; the development and sale by investment banks of complex accounting-driven structures and products to assist corporations to hide losses and liabilities, and thereby improve their published financial condition and credit ratings; and the introduction of highly leveraged employee stock option plans (Travis, Anthony 2002). It became clear in the SEC investigation that Enron had failed during the preceding four years to make proper disclosure concerning various “related party transactions” and to properly account for “off-balance sheet” transactions (Cunningham, Lawrence 2002). This resulted with twenty percent of Enron’s shareholders’ equity wiped out–a total of $2.2 billion. Enron’s external auditor was Arthur Andersen, which also provided the firm with extensive internal auditing and consulting services. In light of Enron's bankruptcy filing and following SEC investigation, Arthur Andersen, auditor and provider of consultancy…
Course 1: Ethics Businesses and Management
Introduction----what is business ethics?
The textbook says ‘ethics in management is concerned with those parts of organisational, operational, occupational and professional conduct that relate to absolute standards and moral principles.’1
Absolute standards and moral principles are always varying due to different views. For example, foods from fast/convenience restaurants like McDonalds and Burger King are unhealthy. On one hand, the manager does not…
In order to understand ethics lets define it. “Ethics: an area of study that deals with ideas about what is good and bad behavior: a branch of philosophy dealing with what is morally right or wrong” (http://www.merriam-webster.com/) Trust in chooses individuals make in support of their company or themselves is defined by their character. In today’s companies the thin line between trust in individuals as well…
Ethics add value to a person and in turn, to society. Ethics require a personal code, a set of beliefs and values that help us to make meaningful choices. The key word in this last statement is, “choice.” Perhaps the most beautiful aspect of humanity is the diversity of thought and lifestyle. I believe that ethics and diversity go hand in hand, as each individual has developed their codes based on their personal experiences and backgrounds. It is this fact that I do not believe in one set of ethics…
Ethics in the Work Place
I chose ethics in the workplace because it is a topic that is very important in my opinion, but one that gets overlooked so many times. Each person has their own views and thoughts of what is right and what is wrong and how to deal with them. While you may think that one particular person may not necessarily be right or wrong the law would beg to differ on certain situations. Other times what one considers to be an ethical decision is not always a legal matter, so the line…
enter their own personal account to accumulate other people’s points. Companies have established policies and procedures to make sure that the company is always in benefit and everything is correctly done that the CEO would agree with.
The Code of Ethics of a company is mainly to assist members in making decision while working. Some decision are “wrong” and some are “right” according to the company policy. Within the document, the company’s values and mission statement are woven in between it. Many…
Social, Legal and Ethical Issues
What is Ethics?
What is the origin of ethics? What are the different approaches and teachings of ethical reasoning? How are these approaches used to make an ethical decision? How are ethics relevant to both an individual and a corporation?
The origin of the term ‘ethic’ has been around for centuries. The word ‘ethics’ is from the Greek word ‘ethos’ which is translated to equate to English as ‘character’ or ‘custom’. Furthermore…
How have you educated your boss, peers, or direct reports about what you are learning in class?
We hold bi-weekly team meetings to ensure cohesive communication. Over the last month, I presented the ethics benchmarks to our team and we discussed how it applied to our organization. The staff became highly engaged in these exercises, as it brought us together to think about how our organization conducts itself in a more ethical manner. The owner of our organization, also present in the meetings, was…
Environmental Ethics: Catholic View
Ethics are values and attitudes that inform the public on what is wrong or right. One of
the global ethical concerns is centers around environment issues. The environment has enticed
concerns from philosophers, religious leaders, ethicist, policymakers, lawyers, environmental
professionals, economists, ecologists, wildlife biologists and conservationist; all who have an
ethical concern about human uses and interaction with their environment. Environmental ethics
Ethics and Social Responsibility
Feb. 22, 2014
Ethics and Social Responsibility
Ethics is the science concerning the right and wrong of human action (Boylan, 2009). As children we are taught by our parents right from wrong, but as adults we have to make decisions to do the right or wrong thing. My personal experience is when I went to Wells Fargo Bank to cash my check. The teller over paid me by fifty dollars. When I realized the teller overpaid me, I return to the bank…