Enron Corporation: Ethical Corporate Governance and Sarbanes-Oxley Act, 2002

Business law and
Ethics

Table of Contents
INTRODUCTION...........................................................................................................................................3
MAIN BODY.................................................................................................................................................3
Explanation of the case Enron Corporation in terms of ethical corporate governance and Sarbanes-
Oxley Act, 2002........................................................................................................................................3
CONCLUSION...............................................................................................................................................6
REFERENCES................................................................................................................................................6

INTRODUCTION
Business law is the part of law which has been commenced specifically for business
sector so that each of the activity can be governed. It is necessary to understand that whenever
any of the organization perform their work, they should be able to analyze each of the factor in
specified manner so that errors will not be committed. It is essential to understand that each of
the activity plays the vital role in current scenario. Along with business law, business ethics also
a crucial factor which needs to be considered. According to ethical value, business activity needs
to be conducted but at the same time, any of the person should not be affected because of the
business decision being taken by the entity. In context of the file, important topic will be
discussed related to Enron Corporation and their scandal by considering ethical corporate
governance and Sarbanes-Oxley Act, 2002.
MAIN BODY
Explanation of the case Enron Corporation in terms of ethical corporate governance and
Sarbanes-Oxley Act, 2002
Case Summary: Enron Corporation is one of the American based entity dealing in the
sector of energy, commodities and services. Company was performing quite will in the market.
The balance sheet of the company forces the investor to invest their capital within company. But,
later on it was identified that company was struggling to perform effectively and liability was
increasing as compared to their total assets (Madden, 2019). Here, accountants and management
together tried to present false accounting data so that company can ensure in front of investor
about their performance. It went exactly in their favour and company was found to have a
scandal of around $79 billion. In addition, employees’ pension fund was used without obtaining
their permission which was also among the major issue in this particular case.
Ethical Corporate Governance: Ethical Corporate Governance includes the frameworks
as well as strategies which a corporation will have in order to resolve problems related to what it
works and functions on a daily basis. It is crucial to highlight that corporations exist solely to
make products that can be used to earn revenue. The aim should, furthermore, be combined
through systems to ensure that even a business seeks profitability without falling off the cliff to
the domains of illegal conduct. The business entity always wants to earn profit but they must ensure