Problem
Oversimplifying the case of Enron and Arthur Andersen, Enron was using some accounting practices that were questionable. Because Arthur Andersen was an independent auditor, they were responsible for reporting any questionable accounting practices might be risky to the shareholders of Enron. The Security and Exchange Commission was responsible for requiring and publishing accurate information about Enron's accounting information. In the end, a few Enron employees went to jail, and Arthur Andersen stopped doing business under that name.
A. Identify what you consider any conflicts of interest in the case of Enron and Arthur Andersen.
B. What could have been done to avoid the conflicts of interest you identified?
C. How would you change the laws to correct the problems that came up in the Enron and Arthur Andersen case?
D. Explore how Enron and Arthur Andersen might have been encouraged to act ethically other than direct legal pressures.
E. To what extent (if any) should sustainability concerns and issues be incorporated in accounting analyses?
F. When (if ever) should organizational decisions with sustainability-related impacts and significant associated cost-implications (savings or expenditures) be shared with shareholders?