The Enron Scandal Writing Assignment

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The Enron Scandal
1. The main factor that caused Enron’s demise is a series of unethical and dishonest financial transactions that involved structured financings made by accountants and other investment bankers. They included misleading accounting and financial reporting, dishonest corporate governance, compensation system of directors, conflict of interest, and poor leadership style.
2a. A salient ethical problem of transforming energy into financial instruments at Enron is the way the CEO Jeffrey’s Skilling changed the company’s corporate culture to adopt a transformed image as a trading company. Marketing of derivative financial products showed that Enron was making huge profits while in reality the profits were simply hypothetical and declining.
2b. Skilling’s statement of focusing on the interest of shareholders raises a problem since it indicates that he was solely focusing on increasing the price of the company’s share. This had negative impacts since the company failed to consider the real fac...