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Essay Available:
Pages:
2 pages/≈550 words
Sources:
1 Source
Level:
MLA
Subject:
Business & Marketing
Type:
Research Paper
Language:
English (U.S.)
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MS Word
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Topic:

Corporate Social Responsibility Research Assignment (Research Paper Sample)

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Corporate Social Responsibility

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Corporate Social Responsibility
The Enron scandal is regarded as a major financial act that revealed the need for new and additional public auditing and accounting in the united Sates. It is important to note that Enron was the largest financial institution, and was considered as the most financially sound organization in the United Stated. Not only did it participate in numerous ventures associated with energy, but it also had oil and gas futures, including power plants and oil refineries (Peavler). The company was also instrumental in enhancing its image through corporate social responsibility that involved financing numerous research endeavors. Furthermore, before the government had decided to deregulate the gas and oil industry in order to enhance additional competition, companies such as Enron took advantage of the regulations and found a plausible platform to cheat. Numerous crimes and misdeeds that were committed by the management team at Enron were ongoing and extensive, and they played an instrumental role in escalating the scandal.
There were a number of individuals and organizations that were involved in the scandal. The Enron scandal was revealed to be a collision among Enron accountants, auditors at Arthur Andersen firm, and fraudulent behaviors of other external auditors. Studies have revealed that financial executives were given a huge liberty of making illegitimate financial decisions that compromised the financial systems. In addition, absence of strict regulations enabled the banking industry to make speculative business practices that contributed to the financial turmoil. The Enron Scandal was initially publicized at the end of 2001, and by 2003, the company had transformed from being the most innovative firms to an organization brought down by mismanagement and corruption. Basically, it can be argued that the Enron scandal played an instrumental role in enabling the federal monetary system in the U.S. to implement measures that would reduce corporate crime, particularly in the financial sector. (Peavler).
The scandal which took place in the U.S. led to the implementation of the Sarbanes-Oxley Act (SOX Act). SOX Act is often credited for having significantly reduced corporate fraud and enhancing investor protections (Donald and Ghoddoucy). Since the collapse of Enron, an array of financial laws and regulations were implemented to tighten corporate oversight. There have been numerous changes, with the main one being the SOX Act which have been instrumental in doing two fundamental things (Maleske). To start with, it established the Public Company Accounting Oversight Board (PCAOB) that was tasked with inspecting and registering public accounting firms, as well as modifying and adopting auditing standards. In the past, accounting firms were registered at state level. However, in terms of federalism, the SOX Act was a significant change that was implemented as a matter of principle.
Second, the SOX Act ensured that the PCAOB was empowered to implement enforcement actions, which is concurrent with the enforcement power that had been adopted by Securities and Exchange Commission (SEC). This implies th...
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