Unethical professional values were symptoms of systemic problems for Enron. “Enron’s systems of oversight, ethical disclosure, and corporate accountability were flawed leading to the demise of Enron” (Schuler, 2009, para. 2). In fact, in 1999 Enron directors waived the company’s code of ethics allowing the CFO, Andrew Fastow, to run an investment partnership that traded with Enron. Enron not only committed financial fraud, but it has been alleged that bribes
Attorneys for the family against the machine manufacturer (AECL) The Therac-25 design eliminated many of the hardware safety features that been built into previous designs, assuming the software was functioning correctly and eliminated the need for safety features. Prior machines had been known to have software issues that would frequently shut down the machine. No overdoses were given because the hardware intervened. These features were eliminated in the Therac-25, an obvious example of poor judgment on the part of the manufacturer. The manufacturer of the machine responded irresponsibly in investigating incidents and in failing to make changes immediately after the very first incident.
However, the traders were fired once it was revealed that Enron's reserves were gambled away which nearly destroyed the company. After these facts were brought to light, Ken Lay denies having any knowledge of wrongdoing. Needless to say, when required to testify before the U.S. Congress on the reasons for Enron’s collapse, Ken Lay, Jeff Skilling and Andrew Fastow, sought refuge under the Fifth Amendment. Andrew Fastow, Jeffrey Skilling, and Kenneth Lay are among the most notable top-level executives implicated in the collapse of Enron’s. Kenneth Lay, the former chairman of Enron was prosecuted on 11 criminal counts of making misleading statements and fraud.
George Keyworth was not a ethical person because he leaked confidential information and also let a investigation be opened, instead of being honest. CEO Dunn showed an ethical attitude and was forced to resign by board members, which describes the other board members to be unethical also. 2. Who are the stakeholders impacted by this situation? How would you rank their claims? Everyone related to this company is affected by this situation.
In fact he goes on to say that it is bravery to remain skeptical and to accept one’s limitations. He points out that people generally confuse between necessary and causal. This may be caused because some read too much into things. The field of finance is evolving and this book provides a view from a different angle, taking analogies from the financial markets very often. Taleb rarely points out data or figures in defense of his arguments and defends the same by saying that it is a mistake to use statistics without logic, but not vice versa.
While the traditional accounting methods are good to measure past performance and financial stature, it does not allow for managers to see the impact or value that marketing has on the bottom line. For a manager to evaluate the impact of marketing they will need view the current marketing expenditures, sales, and profits to make a conscious decision on what methods are working. While I think placing marketing as an investment is a good concept, determining the value is too biased without a common measurement between all companies in a similar industry. Without understanding the current value of marketing, the marketing budget will be one of the first items cut when the business is in a downturn. Technology in all industries has increased dramatically over the past 10 years so being able to understand the current value of marketing methods should not be as strenuous as it has been in the past.
Of these, I believe two in particular depict the role of accounting in the financial crisis, these being the effects of fair values and the overly complex (and thus allegedly detrimental) nature of financial reporting. Let us first consider the issue foremost in the criticism against the accounting profession: that of fair values. According to Laux and Leuz (2010), the main allegations against fair value accounting in relation to the financial crisis were that they reported overstated leverage prior to the crisis and overstated losses during it, leading to excessive write-downs. These write-downs depleted the capital of banks and investment institutions, which consequently resulted in them making fire sales (selling their assets at very low prices) in order to meet their capital adequacy requirements. This then offset a downward spiral as a result of the contagion effects of the
Providing a high-quality service has its risks, mostly being less cheap than competitors, so keeping your own customers loyal is very important. That’s why Mr Hoffner’s points about how handling that complaint are erroneous. Some different remedies need to be brought: 1. First of all, the $35 at the heart of the matter should be reimbursed him, because it has not any sense that he paid for a bad service; furthermore, all the shirts that Mr Shelton had to buy would have to be refunded. 2.
He suggested that without physician buy-in the plan wouldn’t work. He also shared the Board would not support an idea that secures funding through banks, because they believed that donors would not give once this happened. Dr. Bernauer suggested that selling Glen River to a for-profit hospital management company or making it a profit making hospital owned by the doctors would fix the problem (Drucker, 2009). Dr. Bernauer’s comments contained some truth, but they were slightly short sighted. Robbins and Judge (2011) emphasize the importance of group understanding and buy-in for organizational decisions.
The Enron Collapse To explain the Enron collapse this primary question must be answered “How did the corporate culture at Enron and Arthur Anderson lead to the collapse of the energy giant and a respected CPA firm?” A secondary question is “How the staff of Enron willingly ignored the conflicts of interest and illegal acts of the firm.” My working thesis is: Managements lacked ethical business standard, did not care about conflicts of interest and created a culture where employees were told to make up for losses at any cost. The area of discussed to support this thesis will cover: How CEO’s Jeff Skilling and Ken Lay (who died in 2006) effectively set up a system for self-enrichment at the expense of employees and ordinary shareholders. Andrew Fastow, deliberate establishment of a partnership structure that allowed him to be Enron’s Chief Financial Officer and simultaneously serving as a general partner of the partnerships. Allowing him, to have effective control of both sides of every transaction and inflated Enron’s profits, without having to report any loses. The marginalization of Sherron Watkins, VP of Corporate Development at Enron (and former Arthur Anderson employee) who raised warnings directly to CEO Ken Lay of highly questionably and illegal accounting and trading practices set up by Jeff Skilling.