As the business world prospered and held higher standards, people’s moral ethics also took a turn as well as big well known firms. The world of business is bigger than we think it is; many people think that many businesses get away with fraud or any other kind of wrongdoings. Though I am here to prove that fact wrong, I can add that before the Sarbanes Oxley Act firms were not strictly controlled as they are now. Due to the incident that happened with Enron a huge natural gas company in Houston where they tricked the SEC (U.S. Securities and Exchange Commission) into thinking that all the money they were making were from actual profits. However, all that money was fake and in reality they were in debt and losing money. The only way that Enron was ever getting away with this scandal was paying auditors from Arthur Anderson to make Enron look better to the public; as a growing and upcoming business to consider working for. Arthur Anderson not only helped Enron with a better image to the business world but financially they wrongfully reported their books falsely to cover Enron of getting caught by the SEC. Eventually the SEC caught up with Enron because of their stock shares always rising up so high. The SEC had to do an investigation on Enron and found out that they were committing one of the biggest frauds in the United States. Enron could easily have done fine without lying about their profits and asking for help to improve them company. Though they decided to take the risky route and achieve greater money in the least amount of time by committing fraud, disobeying the rules, and not sticking to their business ethics of following the rules to success without cheating. Cause of cheating Enron shut down in 2001 after being 16 years in service, and these CEO’s whose income were like millions of dollars every year, were fined so much that whatever they had could not cover it plus one of them I know for sure had to serve time in jail and his name was Jeffery Skilling who was sentenced to 24 years in prison but was reduced to only 14 years in prison. He will be released in 2017.
Not only did the SEC investigate Enron they also investigated Arthur Andersen because the auditors job is to find any fraud or errors in books. Once the SEC found dirt on Enron, Enron called the auditors. “The fired partner, David B. Duncan, called a meeting of auditors at the firm’s Houston office and ordered ”an expedited effort to destroy documents” on Oct. 23, the day after Enron disclosed that the S.E.C. had begun its inquiry, the firm said. The destruction apparently did not end until Mr. Duncan’s assistant sent an e-mail message to other secretaries on Nov. 9 that said ”stop the shredding,” the firm said. Andersen had received a subpoena from the S.E.C. the day before.” Now why couldn’t Andersen just give in to the SEC and surrender that they helped Enron instead of trying to shred all the evidence. Andersen could have been given a less painful punishment but since they messed up they paid the consequences. Andersen was one of the big 5 auditing firms in the world next to Deloitte, PricewaterhouseCoopers, Ernst and Young, and KPMG. In 2017 Andersen is no longer in existence because after this great big scandal no other companies wanted to associate with a firm who were disloyal.
People say that business ethics and moral ethics are the same but they aren’t. Moral ethics are what you learn from your parents and every of course not everyone will learn how to behave the same because every parent is different especially the way they teach their children to be. While business ethics is more of a one way streak there we must follow it one way however the rules are of that certain company. There is no other way to follow it because of how your parents taught you differently that does not fall into place within the business world. If an employee does not want to follow the firm’s rules the outcome is being fired. That is when employees start realizing how the world really works and whatever moral ethics they had are gone because of how the business world has changed them to become something they aren’t or become successful.
Berenson, Alex. “S.E.C. Opens Investigation Into Enron.” The New York Times, The New York Times, 31 Oct. 2001.
Richard A. Oppel Jr. With Kurt Eichenwald. “ARTHUR ANDERSEN FIRES AN EXECUTIVE FOR ENRON ORDERS.” The New York Times, The New York Times, 15 Jan. 2002.