Enron Case

1. What are the systemic, corporate, and individual issues raised by this case? systemic Issues: One of the obvious systemic causes of the Enron s tidy sumdal is our profound and restrictive structure. First, current uprightnesss and SEC regulations allow firms comparable Arthur Andersen to pull up stakes consulting serve to a phoner and then turn around and provide the audited report about the financial results of these consulting put to workivities. This is an obvious conflict of raise that is create into our legal structure. Second, a private company like Enron currently hires and pays its own auditors. This again is a conflict of by-line built into our legal system because the auditor has an incentive non to issue an unfavorable report on the company that is stipendiary him or her. Third, most large companies like Enron are allowed to maintain their own employee pension notes. Again, this is a conflict of interest built into our legal system because the company has an incentive to use these funds in ways that advantage the company even when they whitethorn disadvantage employees. And fourth, most companies like Enron have codes of ethics that forestall managers and executives from being involved in another employment entity that does business with their own company.

But these codes of ethics are voluntary and can be set aside by the board of directors. Our legal structure today largely allows managers to enter these arrangements, which constitute a conflict of interest. The managers and executives, of course, have a fiduciary duty to act in the best interest of the company and its shareholders, but the justness leaves considerable discretion to managers and executives to exercise their own business view about what is in the best interests of the company. The Enrons greatest report fraud was done by the person inside the company who indeed in a higher position. This is not lone(prenominal) a crime in the point of view of law but also an organizational fraud which affect everyone in the organization, including... If you want to get a full essay, order it on our website: Ordercustompaper.com

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