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Case analysis: Enron; Ethics, social responsibility, and ethical accounting as inferior goods?

Journal of Economics Library

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Field Value
 
Title Case analysis: Enron; Ethics, social responsibility, and ethical accounting as inferior goods?
 
Creator RASHID, Muhammad Mustafa; University of Detroit Mercy, Unviersity of California Davis
 
Subject Enron (ENE, ENRN); Dotcom bubble; Accounting fraud; Deregulation; Speculation; Corporate culture; Social responsibility; Government intervention; Risk management; Consumer behavior; Energy markets.
N00; M10; M40; M12; M14; G32; K40; K32; H12.
 
Description Abstract. In 2001 soon after the Asian Crises of 1997-1998, the DotcomBubble, 9/11, the Enron crises triggered a fraud crisis in Wall Street that impacted the market to the core. Since then scandals such as the Lehman Brothers and WorldCom in 2007-2008 and the Great Recession have surpassed it, Enron still remains one of the most important cases of fraudulent accounting. In 2000’s even though the financial industry had become highly regulated, deregulation of the energy industry allowed companies to place bets on future prices. At the peak of the dotcom bubble Enron was named as a star innovator but when the dotcom bubble burst, Enron’s plan to build high speed internet did not flourish and investors started to realize losses. Furthermore, the financial losses of the operations were hid using the market to market accounting technique instead of book value and using special purpose entities to hide debt. The root cause that was identified as a company with a toxic corporate culture focused on officer compensation rather than social responsibility and hence faulty leadership. Is it possible then that; ethical accounting practices, social responsibility and ethics all become inferior goods as income rises in an ‘irrationally exuberant’era?Keywords. Enron (ENE, ENRN), Dotcom bubble, Accounting fraud, Deregulation, Speculation, Corporate culture, Social responsibility, Government intervention, Risk management, Consumer behavior, Energy markets.JEL. N0, M1, M4, M12, M14, G32, K4, K32, H12.
 
Publisher Journal of Economics Library
 
Contributor —
 
Date 2020-07-12
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://www.kspjournals.org/index.php/JEL/article/view/2072
10.1453/jel.v7i2.2072
 
Source Journal of Economics Library; Vol 7, No 2 (2020): June; 97-105
2149-2379
 
Language eng
 
Relation http://www.kspjournals.org/index.php/JEL/article/view/2072/2087
http://www.kspjournals.org/index.php/JEL/article/downloadSuppFile/2072/1082
http://www.kspjournals.org/index.php/JEL/article/downloadSuppFile/2072/1083
 
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