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Enron: Ethics and Auditing Gone Wrong Enron was once a promising company headed toward greatness but all of this was just for show and thus not long enough; it was discovered that one of the world’s most admired companies was just faking all their records taking down a lot of investors of their company to bankruptcy as well as their employees. The Enron scandal has paved the way not only to America’s consciousness on risks involved on how corporations work, but how stakeholders can be victimized by fraud if corporations are not properly audited and regulated. It also opened consciousness of the whole world as well. In this paper, we will take a look on how proper implementation of business ethics and auditing can help avoid tragedies like Enron.
1. Enron’s rise to Top
2. Fall of Enron
3. Reflection
Enron’s rise to Top Kenneth Lay founded Enron in 1985 and after two years, the company becomes involved in a scandal after two traders suspiciously got consistent profits on betting on the oil markets. The auditors found out about their schemes but Lay still encouraged them to “keep making us millions” (1). When Enron’s reserves were found out to be gambled away by the traders, they were fired and this almost brought down the company. Lay, after finding this out, denies any knowledge of wrong doings. Due to this, Lay hires a new CEO Jeffrey Skilling who agreed to join Enron on the condition that the company uses the market to market accounting method which allows Enron to record potential profits immediately upon signing of deals despite the fact that the profits have not yet been realized. Aside from that, Jeffrey Skillng imposed a very competitive working environment at Enron where the bottom 15% performers in the company were to be fired annually.
From 1990-1998, Enron Corporation’s stock rose to 311 percent, only slightly higher than the rate of growth in the

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