Enron - Essay Example

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Enron began violating all four dimensions of business integrity capacity when it became obsessed on increasing the value of its stock prices and the enjoyment of benefits that can be derived from it like bonuses and perks. With regard Arthur Andersen who is supposed to be a…
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Enron Enron began violating all four dimensions of business integrity capa when it became obsessed on increasing the value of its stock prices and the enjoyment of benefits that can be derived from it like bonuses and perks. With regard Arthur Andersen who is supposed to be a third party auditing firm, it instead entered into a business relationship with Enron that is considered to have a conflict of interest and eventually connived to cover the frauds committed by Enron. The relationship is already wrong at the beginning because Andersen lost its objectivity and independence as an auditing firm when it became an employee of Enron being a management consultant.
Enron also promoted a corporate culture of callousness when it arbitrarily ranked half of its employees as non-performer which it will eventually fire. The other half remaining may have remained in the company but adopted a corporate value system that is virulently greedy and fraudulent as promoted and reinforced by its leadership through its performance appraisals.
What could Enron have done was to objectively reflect the value of its asset liability instead of misrepresenting them that provides the impression that the company was performing well when it was not. Also, Enron should have promoted a culture of excellence and integrity among its employees to continuously look for ways to improve instead of promoting the culture of greed.
Arthur Andersen as an auditing should have maintained their objectivity and did not become a management consultant to Enron because that would construe as a conflict of interest. When it learned of Enron’s fraudulent accounting practice, it should have reported them to SEC instead of conniving to hide them. Read More
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