Which Ethical Principles Have Been Violated As A Result Of This Scandal?
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1. Which ethical principles have been violated as a result of this scandal? Explain the nature of each violation.
Ethics is a set of moral principles or values. (Arens, Elder, Beasley, & Splettstoesser). In the Enron scandal violated many ethical policies. The policies which were violated are trustworthiness, citizen and responsibility.
Trustworthiness- Enron was not being honest and reliable with their stakeholders for an example Enron misinterpreted their financial statements and they did not show the company liabilities. This affected a lot of shareholders, and not only had that Enron broke the trustworthiness between their auditors by not providing them all the financial documents they needed for the audit to be completed. Enron intentionally…show more content… They also fail to act ethically which as a result affected the economy in the states because all investors were very hesitant to invest in the stock market. Enron was not accountable for their actions and also Enron did not use resources wisely and economically.
Citizenship- Enron did not obey the laws. They continuously broke the law by creating shell companies to hide the losses Enron made. If they did not brake the laws there would not have been scandal and wouldn’t have affected the United States economy.
Respect- This was always questionable with the way they managed their employees with the system that became to be known as, “Rank and Yank” method of evaluation to even Jeff Skilling was recorded calling an analyst “asshole” during a conference call (Gibney, 2005). These actions show that they were such a large company, so therefore they didn’t have to play by the rules. This kind of behavior lost the respect employees had towards the executives of the company
2. Which rules of professional conduct have been violated as a result of this scandal? Explain the nature of each