Impacts of Unethical Behaviors

Impacts of Unethical Behavior

Personally, I remember the collapse of Enron in 2001, which exposed the reality that there are a number of unethical businesses and accounting practices in the world. Enron CEO Kenneth Lay had combined his Natural Gas Company in Houston with other companies. Following this merge, the company began growing rapidly. In the mid 90's the deregulation of the gas and oil industries allowed Enron to spend a lot and buy other companies as well as serve as a big supplier. The extreme growth correlated directly with Enron's stock prices which increased through this particular time period.

After Jeffrey Skilling was hired, Enron's corruption increased quickly. Both Lay and Skilling continued to inflate profits and documented false profits as present in the current fiscal year. Lay and Skilling also created partnerships that allowed them to maintain the company's multi-million dollar debt off the accounting ledgers that were shown to investors. The behavior of deception led to a Fortune magazine writer to question whether or not Enron was overpriced. This article led other financial analysts to question the same thing, which then launched an investigation that eventually uncovered Enron's unethical behavior in their accounting practices.

Looking at the facts given, if I was an employee and worked as an accountant for Enron, I could not participate with the deception that was occurring. If I knew that the executives were reporting false earnings, I would have to report it. I would not want to work for a company that would make unethical decisions. The accountants working for Enron felt as though they were victims as well. The accountants state that they were following directions. However, they continued to do it, and they played a role in the deception and ultimate demise of the company.