Case Study Unit V Alfred Elvins Columbia Southern University
The article, “Accounting for Enron” (Beauchamp, T. L., Bowie, N. E., & Arnold, D. G., 2009) is a writing that addresses the issues and outcomes of unethical behavior occurring in a major firm. The auditing firm that was hired by the firm was also unethical. The fraudulent accounting practices cost a great deal of people large sums of money. There were several employees that lost their job because of the actions of a select few. The article also discusses that the whistle blower was faced with an economic and ethical dilemma. She had to decide that if she told on the firm she may lose her job.
The article discusses the aggressive legal counsel that was employed by Enron. Each member of the auditing team was not effectively doing the job that they were paid to do. The employees were complacent and minimized the negativity that was occurring in the business. (Beauchamp, et.al. 2009) The article is clear and concise. The reader is able to understand the major issues of marketing in an educational setting.
CRITICAL THINKING QUESTIONS
1. What responsibilities did David Duncan owe to Arthur Andersen? To Enron’s management? To Enron’s stockholders? To the accounting profession?
David Duncan had the responsibility to Arthur Andersen to be professional and ethical. He was the head auditor and it was his duty to ensure that the other auditors completed the daily tasks with integrity. He had the duty to make sure the audit team members were led in a responsible and ethical manner. (Beauchamp, et.al. 2009)
Duncan owed Enron’s management and the stockholders the same thing that he owed to Arthur Andersen. He had the responsibility to the management team to provide them with truthful and accurate accounting procedures and reports. (Beauchamp, et.al. 2009) He was creating excessive wealth for his company at the cost of the client.
Duncan owed the stockholders of Enron to provide them with the accurate financial reports of the company. The stockholders should have been provided with accurate profit and loss statements. Duncan should have been honest with the company as well as himself when he falsified reports. He also owed the stockholders an explanation for ordering that documents be destroyed. (Beauchamp, et.al. 2009)
Duncan owed the accounting profession to conduct audits in an unbiased manner. He failed to remain skeptical. (Beauchamp, et.al. 2009) He owed the profession to remain professional and conduct a thorough audit. He failed to provide the profession with a proper audit that was free from fraud.
2. What are the ethical responsibilities of a corporate attorney, such as Nancy Temple, who works for an “aggressive” client wishing to push the envelope of legality?
Illegal acts and practices cannot be protected by a corporate attorney. Temple was acting in a manner that was not legal. She ordered that the accounting leader shred documents. It is believed that she knew as an attorney the rules of evidence and that is why she ordered auditing documents destroyed. She later told the auditing staff to stop destroying the documents. She did this when she was given notice that the SEC would be seizing Enron’s documents. She did this to possibly mitigate her role in the destruction of the documents.
She had a duty to act in the best interest of the public company. She should have acted in the best interests of the stockholders instead of the management team. She was a corporate attorney for a publicly traded company. She had a professional and ethical responsibility to work for the investors in the company.
3. Under what conditions should an employee such as Sherron Watkins blow the
