Ethics in Accounting
Pace University – New York
Accounting for Decision Making, MBA 640
Required Research Paper
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Table of Contents
Number Content Page Number
1 Introduction 3
2 Ethics in Accounting 4 3 Enron Scandal 6
4 Satyam Scandal 8
5 Conclusion 10
6 References 11
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• What is “Ethics”?
Ethics, also known as moral philosophy, is a branch of philosophy that addresses questions about morality—that is, concepts such as good and evil, right and wrong, virtue and vice, justice and crime, etc.
• What is “Accounting”?
Accounting is basically maintaining and providing …show more content…
ENRON scandal is looked upon as an unofficial blue print of a White Collar Crime. White Collar crime is a crime that is nonviolent and mainly consists of unethical behavior taking into consideration finances.
The main participants and conspirators of the scandal were Kenneth Lay, Jefferey Skilling and Andrew Fastow. Kenneth Lay was the CEO, Jefferey Skilling was the President and Andrew Fastow was the CFO for ENRON. They with other high level officers of ENRON planned this scandal carefully and executed. Its non-transparent accounting, complex structure and unethical behavior of executives were the reason of ENRON’s downfall.
ENRON reported its cash flow and income up, its assets value inflated and its liabilities off the books. ENRON’s audit company Arthur Andersen also ignored these issues; rather, Arthur Anders Co was pressurized to ignore these issues.
Due to this Arthur Andersen Co was also sued for fraud and unethical behavior.
ENRON and Arthur Andersen Co were sued under the Sarbanes-Oxley Act.
Ultimately ENRON was shut for declaring inflated assets and Income. ENRON declared $102 billion in excess.