Enron collapse A look back Essay

Enron collapse A sprightliness backIntroduction Enron was blueprinted as a result of merging with a nonher(prenominal) come with and it became a victorious bodied. The satisfaction of the business enterprise owners is to see how it grows fast and to puff more investors. There argon rules and economy that g overns the embodied monetary report that is unmannerly for inspection by potential investors (Folger, 2011). The audit of these monetary reports should bankrupt the accurate monetary state of the go with and this should be make known to the stakeholders of the company. The stakeholders of a company campaign an important map in emanation of the business and the going misgiving of the company (Sterling, 2002). The company of Enron did non manage its debts and whence looked for means of hiding the truth from its stakeholders so as to continue qualification boodle. The carry of a business is to make proceeds and be able to pay the debts of the cred itors and in any case attract investors who are interested in the business. Most investor relay on the financial statement to determine whether to invest or not to invest (Folger, 2011). The Enron Company was a big company that was famous and successful before its fall. The corporate attracted many investors since they financial report showed how the business was growing at high rate (Bauer, 2009). However the corporate management did not let out the neat and fair view of the financial reports. The financial report of a company should not mislead the shareholders or its members. Moreover, in the Enron crap there were some cases in which it showed bobble of its financial reporting since the corporate did not display professedly and fair financial accountings to its stakeholders. The corporate used financial craft and mark- market accounting to hide its veridical debts and authorized financial situation (Folger, 2011). These reports make the investor believe that the cor porate was making profit while it was making detrimentes in real sense. It is in addition a invent of fraud to stakeholders since it cannot meet all its debts and in case of winding up majority of the investors and shareholder would suffer massively. The Enron scandal was deemed to be great since it had huge debts to settle and its assets could not settle these debts. Indeed, financial mis grapple affects a large group of stakeholder and leaves a great mark that cannot be erased (Sterling, 2002). For example the shareholders of Enron corporate were highly affected and suffered a loss of billions that were not recovered since the corporate went weaken and the assets of the business were also bogus in existence. The investors also suffered greatly from these financial misconduct, they wooly-minded their resources. In addition, the employees suffered greatly by losing billions of bounty benefits due to the misconduct of financial reports which guide to the bankruptcy o f the Enron and then could no semipermanent pay them (Folger, 2011). The financial statement of a company is very important to the investors, it gives an over view of the st efficiency of the business and its ability to pay debts. The Enron corporate fai conduct to disclose true(p) and fair view financial statements by hiding its real financial reports and the investors were misled and also due to many investments do by the company lead to its bankruptcy (Sterling, 2002). The character of accurate financial reports is to help the investors and also the company to know to what extent they should declaration or invest in other businesses. It also helps in managing of the companys debt thus making profit only if the Enron was only interested in making a lot of profits that led to their down fall. Ethics are rules that prevail every business and its members on how to conduct their daily roles in the company (Brady, & Dunn, 1995). In other words, the managers of this co rporate owe their verity to its stakeholders and their interest ought to be the interest of the business (Bauer, 2009). In deontology of the Enron corporate, the management had a art and obligations to display the true statement of finance and also to operate the business in the interest of the stakeholders and not their interest. As the leaders they ought to make sure that the going concern of the business is kept and the assets of the company are secured. In addition, the duty of the Enron managers was to disclose the true and fair view of financial reports (Bauer, 2009). On other hand, utilitarian is a form ethic that is used to show the constructive side of the organization, for example by disclosing the false statement to stakeholders thus blinding them of the real situation (Folger, 2011). The Enron leaders used unlike methods to conceal the truth about its debts and faked the profits. They made the business look attractive and therefore more investors invested in the business. At the end, the morality rules were violated and the leaders had a role to play .Enron had a role to disclose the truth which could declare rescued the company (Bauer, 2009). If at the beginning, the company revealed the truth it would not have ended bankrupt and the employees would have secured their jobs. Finally, the company had a duty to disclose the true financial statements and also carry through the company from falling and the scandals would have been avoided. The companies should intrust into practice the ethics governing the corporates. Therefore, to close out any future happenings such as the past frauds in the company, there has been an enhance regulation as well as oversight in the company (Folger, 2011).ReferencesBauer, A. (2009). The Enron scandal and the Sarbanes-Oxley-Act. Munchen GRIN Verlag.Brady, F. N., & Dunn, C. P. (1995). Business meta-ethics An analysis of 2 theories. Business Ethics Quarterly, 385-398.Folger, J. (2011). The Enron collapse A l ook back. Investopedia, December 1. Retrieved October 25, 2014, at http//www.investopedia.com/financial-edge/1211/the-enron-collapse-a-look-back.aspxSterling, T. F. (2002). The Enron scandal. cutting York Nova Science Publishers.Source document