Enron: The Effect of Unethical Behavior

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The affect of the unethical behavior of the profitability of Enron was that the third party “outside” independent auditors was not able to backup and have accounting financial statements, some of those auditors and financial institutions may have been misled by the corporation’s net income. If I was an accountant for this company I would have followed regulated federal security laws, and if failed to provide prove of documents or financial statements, I would admit to my mistakes but also come with a plan stating ok I failed to follow policy rules but I have a way of turning things around and finding out exact detail of what went wrong and how to accumulate profits & revenue. One thing you learn when in any career of any business always keep track of everything you do, have copies whether it’s via email or hard copy so that when you are audit you are prepared. There are several accounting practices involved, one concern was whether or not Special purpose entities by a corporation should or should not be consolidated with the corporation’s financial statements. Another concern would be the latitude allowing an agreement of non-exchange trade agreement between two parties for energy contracts. And the third concern would be giving out information to be compliance with legal regulations or workplace rules particularly to financial statements or management discussions and analysis. I would believe Derivative could have prevented this because even with all the sub contracts that were taken place little information was available for the profitability between the businesses with no reporting requirements, no supervision of unregulated derivatives markets. The nature of the controversy regarding Enron’s practices was that the auditing firm that was private a partnership with the corporation; both parties arranged financial transactions with banks to keep back a cut of unprofitable investments from the corporation’s financial statements.
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