Effect of Unethical Behavior Article Analysis

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Unethical practices and behavior are common in today’s world. There are variations of situations known as unethical practices and behavior in the accounting world. Misleading financial data for personal gain, understating expenses, and misuse of funds are common unethical practices and behavior. Other uncommon practices and behavior are kickbacks and manipulation. It is important to understand unethical practices and behavior and how to handle these situations as they arise. Enron Corporation had a substantial impact on how unethical practices and behavior are dealt with in today’s business world. The Enron scandal is considered to be one of the most notorious within American history (Finance Laws, 2011). Enron Corporation reported sustainable financial stability by the use of accounting fraud rumors, bribery, and irregular accounting procedures. It was not until Enron Corporation’s profits and revenues from controlled limited partnerships were revealed that the Enron scandal plummeted. Enron Corporations debts and losses were not reported on the financial statements. Enron Corporation misrepresented earnings, manufactured fraudulent energy crisis, and embezzled. The Sarbanes-Oxley Act of 2002 was created to stop corporations, such as Enron from misrepresenting financial data. The Sarbanes-Oxley Act 2002 was created to make accounting in the corporate business world more transparent. It is under this act that the Financial Accounting Standards Board mandates corporations to use Generally Accepted Accounting Principles when reporting to shareholders. The rules that Sarbanes-Oxley Act 2002 created are enforced by the Securities and Exchange Commission. If these rules are not followed criminal prosecution can be enforced. Corporations’ financial statements are held to standardized accountability with internal controls and procedures that corporate executive

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