Ethics in Financial Management

Paper Summary:

The paper discusses how the Enron scandal encompassed a myriad of complex transactions involving mysterious partnerships that allowed Enron to book huge corporate profits and payments to insiders, while simultaneously ignoring any associated financial liabilities. The paper explores the topics of ethics and morality in the financial management industry, using the accounting scandal of the Enron case as a model of what financial institutions of today should not do. The paper also discusses briefly what actions the management at Enron could have taken to avoid the financial disaster that occurred.

Outline:
Executive Summary
Introduction
Enron's Fraudulent Financials
Ethics and Morality at Financial Institutions
Preventive Actions for Financial Institutions to Take
How the Enron Fraud Could Have Been Avoided

From the Paper:

"In the past few years, several scandals involving the improper management of financial data have emerged; however, the fall of global business giant Enron in 2001 is the most notable. That same year, Fortune Magazine had selected Enron as the most innovative company in America, six times in a row (Canto, 2002). In just 15 years, Enron grew from nowhere to be America's seventh largest company, employing 21,000 staff in more than 40 countries. As a result of this widespread success, Enron was hailed as a new-economy company that would act as a business model for others to follow. However, also in 2001, Enron filed for bankruptcy, and it was revealed that the firms' success was really attributed to the fraudulent manipulation and unethical management of financial data."

Sample of Sources Used:

• BBC News. (2006). Q & A: The Enron Case. Retrieved December 5, 2006, from http://www.news.bbc.co.uk/2/hi/business/3398913.stm.
• Bottorff, D. (2004). Culture Management Essentials. Retrieved November 24, 2006, from http://www.ethicsquality.com/about.htm.
• Canto, V. (2002). How Enron Failed. Retrieved December 4, 2006, from http://www.nationalreview.com/nrof_canto/cantoprint01402.html.
• Hays, K. (2006). Enron Figures Appeal Charges. Retrieved December 5, 2006, from http://www.chron.com/disp/story.mpl.
• Kadlec, D. (2002). Enron: Who's Accountable? Retrieved December 4, 2006, from http://www.time.com/time/business/printout/0,8816,193520,00.html.

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