Enron Corporation - Enron Corp A Review of its Accounting...

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Enron Corp: A Review of its Accounting Malpractice and Corporate Social Irresponsibility Corporate Social Responsibility (CSR) is the concept that a corporation's responsibilities include other stakeholders and includes other responsibilities above and beyond a return for shareholders. These responsibilities include legal, ethical and philanthropic responsibilities in addition to economic responsibilities (Trevino and Nelson, 2005, p. 31). Identifying companies that are socially responsible are more difficult than identifying those which are not. It is a common agreement that all companies must operate within the legal bounds and protect the stakeholders. However, despite the high risks and serious consequences involved, some companies operate beyond these parameters just like what Enron did. Question is – why was Enron considered to be socially irresponsible? “Enron believes it has a responsibility to conduct itself according to certain basic tenets of human behavior that transcend industries, cultures, economics, and … boundaries… We work with customers and prospects, openly, honestly and sincerely…” – Memo from Kenneth Lay, Enron CEO (McLean and Elkind, 2004). Well, that was what all the stakeholders believed before the collapse of Enron. Enron, an energy broker company, grew to be America’s 7 th largest company in 2001 employing 21,000 staff in around 40 countries. By early 2001, it became the largest U.S. buyer/seller of natural gas and electricity. Enron was heavily involved in energy brokering, electronic energy trading, global commodity and options trading, etc. Before it
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This note was uploaded on 03/12/2010 for the course GSB 4346 taught by Professor Sss during the Spring '10 term at De La Salle University.

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Enron Corporation - Enron Corp A Review of its Accounting...

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