This is not to say that management should ignore social responsibility such as protecting consumers, paying fair wages, maintaining fair hiring practices and safe working conditions, supporting education and becoming actively involved in environmental issues. Stakeholders other than stockholders can no longer be enrolled. These stakeholders include creditors, employees, customers, suppliers, communities in which a company operates and others. The impact of decisions must be recognized.
The Enron controversy resulted to different political and economic changes which affected both government and private agencies. Enron has developed into becoming a part of America’s top ten companies in the span of nearly two decades. Their sudden rise to power seemed impossible to many industries in the financial world. However, the scam which brought upon Enron success was discovered.
Deception was the name of the game for Enron. They concealed their controversial and suspicious dealings and transaction with their growing debt so that they appear debt-free and admirable to stockholders and the public.
At last, every lie and cover up was made known to many when the company suddenly and unexpectedly filed for Chapter 11 Bankruptcy. That was their last resort. Not even company partnerships and affiliations could save the money and the glory of Enron.
When the news of bankruptcy of Enron was revealed, the reasons behind Enron’s downfall remained unclear and uncertain. There were mixed reactions among businessmen, politicians, stockholders and others. Most of them were enraged while some felt concerned. There were those who were not surprise that the discrepancies with the financial statements could actually happen. It was as if it was the common habit among those who wish to decrease their debt.
Questions such as the reason behind the downfall as well as the possible ways and means for preventing bankruptcy rose among the interested public. What hindered the company or the
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Accounting education needs to teach future CPAs the skills to effectively meet the public’s expectations in the area of fraud. This includes a basic knowledge of criminology and the laws…
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