FINAL BLOG: ENRON
THE FINANCIAL COLLAPSE DRAMA OF ENRON
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BACKGROUND:
Enron Corporation was an American energy company based in
Houston, Texas, United States. Before the collapse in late 2001, Enron employed
approximately 21,000 employees and is one of the world's leading companies in
the field of electricity, natural gas, pulp and paper, and communications.
Enron claimed income in 2000 totaled $ 101 billion. Fortune named Enron
"America's Most Innovative Company" for six consecutive years.
PROBLEM:
One factor is the cause of destruction of Enron
is that earnings management game is very detrimental to the company. In this
case Enron commit fraud in the calculation of earnings, Enron's mark up of U.S.
$ 600 million and hide its debt for U.S. $ 1.2 Billion. This makes the Enron
went bankrupt because it could not fulfill its debts so many injured party.
THEORY:
Code of Ethics is a
pattern of rules, procedures, signs, and ethical guidelines in doing an
activity or job. The code of conduct is a pattern of rules or procedures to
guide behavior. The purpose of a professional code of ethics in order to
provide the best possible services to users or customers. The existence of a
code of ethics to protect act unprofessionally.
CONCLUSION:
Enron Corporation is due to manipulation of the
financial statements with a record a profit when the company suffered a loss.
Manipulation of profits due to the company's desire that the stock remains
attractive to investors. This is one example of a violation of professional
ethics Auditor. selfishness of one party against another party, in this case the
parties that have benefited from the fraudulent financial statements to those
who have been deceived. For that professional ethics should be made to
support healthy practices are free from fraud. Code of ethics regulate its
members and explain what is good and bad and which ones can and cannot do as
members of the profession well in touch with colleagues, subscriptions,
community and staff.
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