Enron Fraud Scandal: Ethical Corporate Governance and the Sarbanes-Oxley Act

ENRON FRAUD
SCANDAL

Table of Contents
INTRODUCTION ..........................................................................................................................2
Brief description of the Enron fraud scandal about ethical corporate governance and the
Sabane – Oxley Act of 2002........................................................................................................2
Case study....................................................................................................................................3
Ethical law breach by chief director of Eron...............................................................................4
Impact on of scandals at workplace:............................................................................................4
CONCLUSION................................................................................................................................6
REFERENCES...............................................................................................................................6

INTRODUCTION
Ethical corporate governance provides guldline to work in a mnaerr which ot break any
moral vaue of norm of sociaslty. It define accountlaiby, legality, trasperacny and complien
rulwes in legal mnner. But indlvuals for fulfil their person need, brek rules an poces of governce.
To iderstand this concet, Enron case has need takem.This report is brefly derfinr each part of
how eron scandel is done and the reason behin his frad, impact of this scandel on corporte sector.
It also guive relevent information regarding Sarbanes–Oxley Act.
Brief description of the Enron fraud scandal about ethical corporate governance and the Sabane –
Oxley Act of 2002
Ethical corporate governance is a combination of systematic policies and procedure
which help managers to flow and ethically conduct their business. Organizations to generate
profits, sometimes, intentionally or unintentionally behave engaged in unethical activities. TO
control or reduce these unethical actions, ethical corporate governance developed. It concerns
fiduciary duty, accountability, mechanism related wit audit. Paul Sarbanes & Michael Oxley
developed this act to protect the right of the investor by accurate and reliability of establishing
corporate discloser. This act is enacted in July 2002. Sections and procedures have enacted this
act which is related to financial as well as audit discloser, corporate. The main reason for passing
this act is to control accounting and corporate scandals. After, Enron accounting fraud case, it is
essential to make rules which prevent unethical actions related to accounting and auditing
(Bhasin, 2016).
Enron scandals the biggest financial fraud at that time in American history. its director breaks all
the rules regarding working ethically. Following is the description of how was engaged in the
accounting fraud and the way the government caught them and the impact of this act is defined
below
Case study
Enron was established in 1985. Key Kenneth Lay, key managerial person of Enron, to
establish this organization, merge Houston Natural Gas with Inter North, these cor[oration
engaged in dealing gas pipeline produce and serve to their customers. Enron trade electricity and
after approval of the government the organization started trading natural gas. In 1992, Eron