Enron Fraud Scandal and Ethical Business Governance

Business Law and Ethics
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Table of Contents
INTRODUCTION...........................................................................................................................2
TASK...............................................................................................................................................2
Discussion Enron Fraud Scandal in relation to ethical business governance and Sabane Oxley
act of 2002..............................................................................................................................2
Suggestions for further tactics and plans in context of chosen company...............................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6
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INTRODUCTION
Business law and ethics are specially developed to address moral concerns of companies.
While they are comprised of range of every changing subject, a comprehending of roles they
play within firms is a good place to begin. Business law identifies minimum standards of
attitudes expected of sole proprietorships and firms. Business ethics go beyond easy legality, it
defines way a company should act; how a firm does what it is legally obligated to do. The
current assignment will be based on Enron Corporation, which falls under category of
commodities & services organizations. This study will explain Enron fraud scandal case in
relation to Sabane Oxley act of 2002 and ethical corporate governance.
TASK
Discussion Enron Fraud Scandal in relation to ethical business governance and Sabane Oxley act
of 2002
Enron Corporation was an American energy, merchandise and services firm based in
Houston Texas. Company was founded in 1985 as a joining between InterNorth and Houston
Natural gas, both relatively small regional organizations (Messina and Ak, 2020). It was
considered as American’s most creative enterprise for six consecutive eras. But at the end of
2001, Enron reported financial situation was sustained by a systemic, institutional and creatively
planned accounting fraud, named as Enron scandal. This scandal brought into query the
accounting activities and practices of many businesses in US and was an element in enactment of
Sarbanes Oxley act of 2002. It also affected wider corporate world by causing dissolution of
Arthur Andersen accounting company, which have been auditor of Enron’s for years.
Enron scandal was an accounting scandal of company, CEO and other executives mislead
organization’s board of members and audit committee on high risk accounting activities and
pressured Arthur Andersen to avoid problems, these are the main causes of fraud.
Fraud case in relation to Sarbane Oxely Act of 2002-
The act is a United State. Federal regulation that aims is to protect and prevent business
investors who invest money in specific project by making venture disclosures much accurate and
reliable. It was spurred by major accounting frauds, Billions of dollars were lost as a outcomes of
these financial issues. Primary aim of this act was to fix auditing of nation’s public firms,
consistent with their full, legal name. This law was passed in response to a number of business
accounting frauds that occurred in 2000-2002 era (Gorshunov and et.al., 2020). Sabane Oxely
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