Enron

Describe how Enron could have been structured differently to avoid such activities. Not having any prior knowledge on the Enron scandal until writing this paper, I found through research that to avoid the activities that Enron went through their structure and some laws could have been different. First our current laws and regulations allow firms to provide consulting services to a company and then provide the audited report about the financial results of those consulting activities. This is a conflict of interest. Private companies like Enron hire and pay its own auditors. This again is a conflict of interest built in the legal system because the auditor has an incentive not to issue an unfavorable report on the company that is paying him or her. Another issue is moral standards got corrupted. Money was being made which lead to cutting corners, taking shortcuts, the focus became getting your own share because everyone in the company was getting theirs. I believe that Enron, the led managers, and executives started thinking that anything was okay as long as the money kept rolling in. Finally, Enron had no ethics committee, all business was internal, if some type of out sourcing would have taken place then these activities could have been avoided, everyone getting paid out of the same pot may have made these individuals feel that their roles demanded them to act in an unethical manner.
Discuss whether Enron’s officers acted within the scope of their authority. By all accounts the officers did not act within their scope of authority. Corporate management has the responsibility to shareholders to maximize the value of the shareholders stock. In contract Enron lost sight of their fiduciary duty to maximize their own profit in comparison to their shareholders. Furthermore, corporate management is responsible for deliberately misleading investors, and employees on their financial affairs. Management falsely reported financial growth and strengths to investors. Their...