Adam S. Wilcox
Impacts of Unethical Behavior
The collapse of Enron in 2001 shed the light on a number of unethical business and accounting practices in the corporate world. In 1986 Enron CEO Kenneth Lay combined his Houston Natural Gas company with several other companies. At this time the company began growing exponentially. By the mid-1990’s the deregulation of the oil and gas industries allowed Enron to spend heavily and purchase companies as well as serving as a major supplier. This astronomical growth correlated directly with Enron’s stock price which also rose throughout this time period. When Jeffrey Skilling was hired Enron’s corruption increased. Together Lay and Skilling continuously inflated profits and documented anticipated profits as present in the current fiscal year. Skilling and Lay also created partnerships allowing them to keep the company’s multi-million dollar debt off accounting ledgers shown to investors. This deception led to a Fortune magazine columnist pondered if Enron was overpriced. Ultimately this article led other financial analysts to wonder the same thing and launched the investigation that uncovered Enron’s deceptive accounting practices. If I were an accountant working at Enron I would not have been able to go along with the deception that was taking place. Knowing that the executives were not properly reporting earnings is something that I would have to report. By going along with the deception the accountants working at Enron thought they may have been the victims because they were only doing what they were told. However, in fact they played an integral part in the deception and ultimate demise of the company.
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