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Effect of Unethical Behavior

In: Business and Management

Submitted By loveiskey32
Words 330
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Looking from different perspectives on how businesses can rise and fall from unethical accounting practices. When you look over businesses such as Enron and Washington Mutual bank you can see the hard lessons of what they had to endure and the end result of the chaos. Take a look for example Washington Mutual they were the one of the greatest banks in America their portfolio was one of the largest. But after acquiring so many mortgage loans it was way too much for the company to handle. Washington Mutual acquired so much liquidity it was over flowing and they could no longer meet the heavy demand. There were some speculations that the investors could have been on using some of the funds towards to downward spiral with faulty mortgage loans.
Taking a look into the company Enron, there were so many infractions made within the company it was only a matter of time before they were found out. Between the embezzlement charges by the Enron executives which led into receiving funds unethically to fund their employees. From there it was investigated that money was being spent for personal reasons for the executives and the employees. The major concern to come into play was receiving large amounts of funds from an unknown investor. There was no ethical way that Enron could prove legally where they were receiving their funds and where exactly they were going.
No matter what the issues are that arise in a company all actions and procedures must have some code of ethics in place to where the company can operate ethically and honestly. Businesses have been taken down because of fraud and embezzlement, the Sarbanes-Oxley Act was started to put all these types of issues in order to keep other companies from getting over on the investors and financial institutions. I am confident that as long as Sarbanes-Oxley Act is in place companies have no other choice but to adhere to all

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