Enron and Worldcom Case Study Essay

1213 Words Oct 27th, 2011 5 Pages
Enron and WorldCom Case Study

This report is based on the demise of Enron Corporation and WorldCom. Both the firms are demised due to the ethical lapses. These ethical lapses come into existence when managements of the firm, uses unethical practices to accomplish the goals of the firm. Maintaining financial and accounting standards in the business practices are necessary. The profession of accounting has become a mockery due to the accounting scandals that took place all over the world in the last decade (Smith & Smith, 2003). The major companies involved in it are Enron, WorldCom, etc. By means of the following paper, the reader will be able to understand the various reasons that are associated with the ethical accounting
…show more content…
The accounting Scandal of Bernard caused the bankruptcy of the WorldCom Inc. The accounting scandal includes the amount of $11 million, which also caused the loss for the investors. Bernard presented false financial statements to the investors to attract more investment in the company's projects. The corporate image of the WorldCom Inc. also declined because of the Bernard Ebber case (Crawford, 2005). The investor felt hesitation to invest the money in the stock of the company due to fear of the accounting irregularities in the financial statements. A huge amount of reduction was also seen in the earnings of the company. Ethical Violations in Accounting Practices at Enron Corporation and WorldCom
The image and reputation of the accounting profession is built due to the members who are involved in this profession with the highest sense of honesty and truthfulness in the interest of the public. Both Enron and WorldCom have violated ethical and accounting principles of honesty and integrity. These companies have failed in the industry; due to the accounting scandal has provoked the full-scale reconsideration of the corporate government practices, regulatory oversight mechanism, accounting/auditing and financial reporting industry and the interiority of security market of the United States (Hinman,

Related Documents