ENRON However, when Bethany McLean, a reporter for Fortune Magazine, and who had a background working at Goldman Sachs examined the balance sheet of Enron, a lot of questions began to surface.
The objective of this study is to answer the questions of: (1) In what ways did the failures by the auditors and other gatekeepers contribute to the failures of Parmalat and Enron? (2) In what manner could it be ascribed to the corporate vulture and lack of ethics from a global perspective? (3) What lessons can be learned from the failures by the gatekeepers that might prevent failures of other companies in the future? And (4) What insights can you derive from the films and links regarding the causation of these scandals?
In the case of Enron, the company was so overwhelming successful and in essence did business with all other companies, that no one thought to question the company. The company was filled with former nerds who wanted to make a name for themselves and who were willing to do anything it took to make it and to make money. There was an overall lack of ethics in Enron's company with individuals being encouraged to make as much money in whatever way that they could make it for the company. Quite simply, ethics did not play a part in the methods used by Enron to make money.
As noted in the book "Enron, the Smartest Guys In the Room," the employees at Enron were held to be so much smarter in the world of ...
In March 2001, McLean noted that the financial statements of Enron were almost impenetrable. It is stated in a CNN report "Remember when it seemed outrageous to suggest that Enron shouldn't be the golden child of Wall Street? Before the congressional hearings, before Arthur Andersen was indicted, before the SEC and DOJ got involved. Fortune's Bethany McLean asked whether a company that traded at 55 times earnings should be so opaque." (CNN 2006, p.1) Stated specifically by McLean was "It's in a bunch of complex businesses. Its financial statements are nearly impenetrable. So why is Enron trading at such a huge multiple?" (McLean, 2001, cited in CNN, 2006, p. 1)
Heller (2003) write for Forbes magazine that the Parmalat situation was labeled by the largest part of the Anglophone media world has as "a European Enron" and states that this "Sounds reasonable: Billions of dollars may have gone missing from the company's accounts But the truth is that the Enron pattern -- off-balance-sheet investing in glamorous Caribbean tax havens, private deals involving management -- is an old Italian custom. Parmalat is reminiscent of several other florid Italian scandals, especially the Banco Ambrosiano affair." (Heller, 2003, p. 1)
The deceptions of Parmalat include "a phony letter, purportedly from Bank of America, that alleges the existence of a fictitious $3.9 billion account. Banco Ambrosiano's chairman, Roberto Calvi (he's the chap who wound up hanging under Blackfriar's Bridge), was in the same spot as was Parmalat's Callisto Tanzi . Both were trying to keep creditors away from a fraudulent balance sheet. In Calvi's case, the bank's money had been invested in a series of offshore New World companies and funds. That money had disappeared into a global black hole. This is, of course, exactly the Enron-Parmalat pattern: receivables from subsidiaries, offshore businesses and funds are carried as assets on the balance sheet, thus quieting the fears of the…
However, when Bethany McLean, a reporter for Fortune Magazine, and who had a background working at Goldman Sachs examined the balance sheet of Enron, a lot of questions began to surface.
" While there are factors like peer pressure and authority that come into play, some research claims to have isolated significant features of an individual's character that make them more likely to commit acts of fraud, bribery and falsification in the corporate context (27, 2009). For example, those people with "high levels of ambition were more likely to transgress moral codes, competitively stab colleagues in the back and make dubious
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It should not be treated as a separate exercise undertaken to meet regulatory requirements." (ICA, 29) Here is expressed a philosophical impetus that drives the focus of this research, that such compliance which will generally concern matters such as corporate accounting, the practice of internal oversight and the practice of financial transaction must be considered inextricable from other aspects of practical, procedural and legal operation in terms of its
At NIB (National Irish Bank), the unethical behavior of employees according to Knights and O'Leary (2005) was at no time suppressed. Leaders in this case according to the authors were largely concerned with profit maximization. This is a clear indication that when leaders fail to mould subordinates, the consequences could be dire. Indeed, a report issued by the inspector general with regard to the scandal at the institution revealed that
However, the coverage of credit ratings in Europe is being considered to a certain extent to be under developed in comparison to that of the United States as a result of the greater enhanced dependence upon bank intermediation. The rating penetration was even found to be quite different even within the quarters of the European Union as a result of the increased prevalence of the different types of financial