Question is about the Enron Scandal in 2001... There is no case study... it is just based off of the case in general. What impacts, if any, do emerging technologies have on the ethics of this case? If not applicable to this case, discuss possible overall impacts on ethical situations in general. Please provide sources Solution Enron was a company that thrived use of latest technologies and had a code of ethics that prohibited managers and executives from being involved in another business entity that did business with their own company. But, the codes of ethics that was voluntary and was set aside by the top management and the board of directors. The legal structure permitted top management to enter the arrangements, that constituted an interest conflict and while the fiduciary duty states the managers and executives hato d to behave and act in the best interest of the shareholders and the company. However there was discretion allowed to exercise their own business judgment related what was in the best company\'s interest. A unethical and illegal activities path was followed. Managerst was succumbing to greed and dishonesty by secretly exercising stock options and constructed fake falsely financial report which enabled to hide billions of dollars of debt. Using this approach Enron management created a noncompliance that existed different than GAAP or SEC reporting standards and abandoned the basic accounting standards of integrity. The main failure of the Enron accounting in terms of ethicas are as follows: -- Poor Management Accountability: Weak management was virtually not accountable to anyone as long as the company showed dramatic stock increases that were justified by the growth in the earnings. --Accounting Rules: The accounting activities became more complex and rule-oriented. Accounting permitted practitioners to take obscure pronouncements, like dealing with Special Purpose Entities that were primarily designed for transactions of leasing, and apply the pronouncement to certain entities for which these accounting was never intended. -- Weak Corporate Governance: Although the board seemed to be independent, but majority of the board members had close ties to company managers through philanthropic organizations. --Enthusiastic Financial Analyst Community: The analysts that were riding the bubble of the financial dot-com economy made a conclusion that they did not have proper tools for the valuation of the emerging companies. --Biased Banking and Investment Banking: Several big financial institutions were willing participants in the process as they were promoted with large underwriting fees for other Enron work. -- Lack of an Independent External Auditor: During the time of Enron, there existed mainly five large external auditing firms who were referred as professional service firms with their business in diverse line. All such firms had big consulting practices. The internal audit work for Enron was performed by Arthur Andersen. Moreov.

1. Question is about the Enron Scandal in 2001... There is no case study... it is just based off of the
case in general. What impacts, if any, do emerging technologies have on the ethics of this case?
If not applicable to this case, discuss possible overall impacts on ethical situations in general.
Please provide sources
Solution
Enron was a company that thrived use of latest technologies and had a code of ethics that
prohibited managers and executives from being involved in another business entity that did
business with their own company. But, the codes of ethics that was voluntary and was set aside
by the top management and the board of directors. The legal structure permitted top management
to enter the arrangements, that constituted an interest conflict and while the fiduciary duty states
the managers and executives hato d to behave and act in the best interest of the shareholders and
the company. However there was discretion allowed to exercise their own business judgment
related what was in the best company's interest. A unethical and illegal activities path was
followed. Managerst was succumbing to greed and dishonesty by secretly exercising stock
options and constructed fake falsely financial report which enabled to hide billions of dollars of
debt. Using this approach Enron management created a noncompliance that existed different than
GAAP or SEC reporting standards and abandoned the basic accounting standards of integrity.
The main failure of the Enron accounting in terms of ethicas are as follows:
-- Poor Management Accountability: Weak management was virtually not accountable to anyone
as long as the company showed dramatic stock increases that were justified by the growth in the
earnings.
--Accounting Rules: The accounting activities became more complex and rule-oriented.
Accounting permitted practitioners to take obscure pronouncements, like dealing with Special
Purpose Entities that were primarily designed for transactions of leasing, and apply the
pronouncement to certain entities for which these accounting was never intended.
-- Weak Corporate Governance: Although the board seemed to be independent, but majority of
the board members had close ties to company managers through philanthropic organizations.
--Enthusiastic Financial Analyst Community: The analysts that were riding the bubble of the
financial dot-com economy made a conclusion that they did not have proper tools for the
valuation of the emerging companies.
--Biased Banking and Investment Banking: Several big financial institutions were willing
participants in the process as they were promoted with large underwriting fees for other Enron
work.

2. -- Lack of an Independent External Auditor: During the time of Enron, there existed mainly five
large external auditing firms who were referred as professional service firms with their business
in diverse line. All such firms had big consulting practices. The internal audit work for Enron
was performed by Arthur Andersen. Moreover the consulting fees of several clients dramatically
exceeded the audit fees. On the basis of revenue and profitability partners were compensated. To
make it worse the auditors were hired by top managers who sometimes succeeded to put pressure
on auditors to acquiesce to aggressive financial reporting preferences
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Refe:
https://www.ukessays.com/essays/economics/causes-enron-collapse-3940.php
http://onlinelibrary.wiley.com/doi/10.1111/j.1745-6622.2006.00092.x/abstract
www.aei.org/publication/enron-and-accounting-issues/
home.utah.edu/~u0343164/barton_files/barton_enron_case.docx
https://bizfluent.com/how-does-4911332-what-caused-enron-collapse.html