fin 534 discussion week 1 j - An Overview of Financial Management Please respond to the following From the e-Activity examine ethical behavior within

fin 534 discussion week 1 j - An Overview of Financial...

This preview shows page 1 - 2 out of 3 pages.

An Overview of Financial Management" Please respond to the following From the e-Activity, examine ethical behavior within firms in relation to financial management. Provide two (2) examples of companies that have been guilty of ethics-based malfeasance related to financial management and determine why their comeuppance was deserved Financial management is the central point of any company or Organization. No Company would run without good financial management practices. If the stakeholders do not take a keen interest in having ethical practices regarding their finances, then it becomes difficult to for the company to run smoothly. Malpractices in financial management are unethical, and they have adverse implications for the company, the stakeholders, and the shareholders as well. In the recent past, several companies have been accused of financial malpractices. Such include Enron Corp. and Tyco. The top-most officials of the company ought to be very keen in matters regarding finances since they are the ones who end up facing the comeuppance at the end of the day. Enron Corporation Is one of the series of companies that have been affected by Andersen’s accounting ethical crisis. Enron was a well-known energy company that was based in Houston Texas. The scandal concerning Enron was revealed in October 2001 such that it caused the bankruptcy of the corporation. The scandal also brought about the dissolution of the Arthur Andersen which was one the largest global audit as well as accountancy partnerships. The corporation is believed to have started engaging in poor financial ethics after Jeffrey Skilling developed a staff that utilized loopholes as well as poor financial reporting standards to hide billions of dollars in debts. The dollars were obtained from failed deals and projects. Andrew Fastow, who was the chief accounting officer not only misled Enron’s board of directors and audit committee but he also went as far as pressuring Andersen to ignore the issues regarding such high-risk accounting practices.

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture