Code of Ethics Paper - Essay Example

(Donaldson, 2005) Section 54.1 Disclosure of Confidential Information Prohibited., Section 68: Retention of Clients records, Section 68.5 Audit Documentation Retention and Destruction Policy are the policies that when violated can lead to criminal or vivil accountant liabilities. The controversy involving powerful institutions has made an immense impact in the corporate world leading to their downfall and the implementation of stringent laws of the government. Enron and Arthur Andersen faced the collapse of their careers which affected the industry and the birth of the Sarbanes-Oxley Act.

The largest bankruptcy in history marked the existence of fraudulent accounting procedures by Enron and Arthur Andersen in 2001. the once blue chip stock ended up to be valued for small meager amounts. Most of Enron’s profits were from transactions with controlled limited partnerships which turned into debts that were not reported on its financial statements The economic implications of the Enron case included the accounting industry’s review of their financial policies with the fear of having the same fate as Enron.

Other companies who also used the same aggressive accounting methods as Enron have been affected. They steered away from the limelight and have seemed to have lay-low for the meantime while the issues are still steaming.. The existence of corporate fraud was verified by the emergence of the Enron case. With this, President George W Bush enacted a new law which targets the detection and prevention of company fraud. The US Pension regulations underwent scrutiny when it was found out that the worker of Enron lost a huge amount of money due to their pensions scheme being invested largely in Enron’s own stocks.

The accounting profession tried to reconsider its structure and policies to be able to take notes of those that need to