Enron Energy Company - Assignment Example

Obviously, Enron behaved unethically. The top executives departed with large amounts of dollars in bonuses and revenues awarded to them by themselves, selfishly. One of the major steps to monitor all the companies inclusive of the fortune 500 was the sighing into law the Sarbanes-Oxley Act in July 2002. This act is sometimes simply known as Sarbox or SOX. The reason for the Sarbox act was to enhance legislative changes to the financial practices and also the corporate governance streamlining. The Act introduced new rules with a major objective of the investor’s protection.

The investor’s protection would be ensured through the improvement of the reliability and accuracy of the disclosures of a corporate business. It also ensures justice is done to wrongdoers and the shareholder's and workers' interests are protected. (Sarbanes-Oxley Act Forum, 2008).  Arthur Andersen, the auditor of Enron was found guilty of obstruction of justice. This was due to his actions of destroying relevant company documents in an attempt to hide the fraud. However, the Supreme Court overturned its decision later which upset the public.

As a consequence, Andersen lost his professional practice and Enron lost its customers that led to its closure. This could have been prevented by good corporate governance according to Tedlow (2007).