The Enron scandal did not just involve one single person or not even one single company. One thing that is certain though everyone involved lost their moral standing and made bad ethical decisions. There was a loss of checks and balances with in the corporation. People did not ask why or how the company continued to keep making money even though it seemed as none of it was there. Every person wanted to pass the blame on to the person below them, acting as if they did not know what was going on, how could they be involved. Starting from the top of the company there was a ripple effect that basically made it ok to make unethical decisions. At the top of this pyramid was Kenneth Lay. He was the founder, chairman and CEO of Enron. All the evidence of the fall of Enron show that Lay existed as a person who was dishonest and acted without integrity. Under his control, Enron was involved in fraud, causing investors to lose billions of dollars and many people to lose jobs. The second person we need to reference in Enron’s case is Jeffrey Skilling. He was the president COO, and also served as CEO from Feb. to Aug. 2001. On August 14, 2001, he left Enron without revealing any financial difficulties of the company. He just said that he wanted to spend more time with his family. However, he sold 500,000 shares on September 17, 2011, making millions of dollars before the ship that was Enron sunk. The third person who played an important role in Enron is the CFO, Andrew Fastow. He was directly responsible for Enron’s disaster. He was the person who manipulated the financial numbers for Enron. Through a web of companies that only did business with Enron, he was able to make it seem that Enron was making money, when it was not.
Arthur Andersen had served as Enron’s outside auditor since 1985. Arthur Andersen contributed to the Enron scandal in a couple of aspects. Firstly, facing the false financial condition, they never revealed it to another source. Secondly, they provided Enron with auditing and consulting services all at the same time, disobeying accounting and auditing standards because there were conflicts of interests among these services. In addition to the conflict of responsibilities, Enron’s top executives had close personal relationships with Arthur Andersen’s employees, which present a conflict of interest. Also, they shredded many papers and documents of Enron after Enron’s scandal was revealed, which could have revealed more of Enron’s wrongdoings.
Enron’s culture contributed much to the ethical scandal throughout the company. Enron was a harsh and arrogant company, who highlighted competition and financial goals, not goals that were to necessarily better the company. For example, in the film it had a rating system which required that 20