Corporate Fraud

Some of you might have heard of the Enron's case which had bring a lot of misfortunes to the people preferably the shareholders and their employees terminated from work. The company were once one of the top company in America and was in NYSE; had collapsed and liquidated so sudden that it shocked the industry. Manipulation of the accounts by the directors and some misappropriation of assets were the cause of such problems. Business complexity had caused the directors in modifying its accounts to show favorable amounts in their financial reports.However, the actions had become a habit and had caused the accumulation of debt in the company. There are also conspiracies involving their external auditor at that time, Arthur Andersen which do not portrait-ed their work in proper due care. Accounting profession had gone blunder as people started to question on the reliability and trustworthiness of accountants in performing their work.

Most important criteria in solving the above case actually lies within the company itself where the directors should become more ethical in performing their duties. More holistic approach should be done where the directors should be educated more in ethical behavior as to prevent the problem of self interest.