In this discussion, you will apply 4 principles from Ethics and Financial Reporting to the Enron case in the textbook Understanding Business Ethics.

Please analyze the Enron case as follows:

1. identify one failure of management in the case as identified in chapter 4 and what conduct demonstrates that failure

2. identify the ethical perspective from Table 4.1 that you believe Enron used to make its decision and why

3. identify one of the issues set forth in the Comprehensive Model of Top Management Fraud and how it applies to Enron

4. identify one "trick of the trade" used by Enron to defraud its stakeholders

TABLE 4.1 How Different Ethical Perspectives Affect Accounting-Based Decisions Ethical Perspective Summary of Ideas Driving Value Accounting Application Self-Interest Everyone in society would Personal self-interest Self-serving bias drove be better off if each the scandals at Enron and individual could pursue his WorldCom self-interests Utilitarian Beliefs A law is right if the Greatest good for the Could be a huge gap benefits to society are greatest number between short-term and greater than the harm long-term benefits Personal Virtues Individuals must adopt a Other people should be Virtues of courage set of values that support given acceptable treatment and integrity protect virtuous behavior accounting's credibility Religious Individuals need compassion Need to have reciprocity Apply the Golden Rule to Injunctions and kindness as well as and compassion accounting decisions truthfulness and temperance Government Fundamental rules are Laws represent the Government regulations Requirements developed from agreed-on minimum standards of and accounting Standards central authorities morality for society set the rules for accounting Universal Rules Inspired rules dictate action Rules will be used to Rules and principles must for the greater good eliminate the self-interests be integrated to control of those making the self-interests decisions Individual Rights A summary of rights Protect each individual's Focus on stakeholders that can be agreed on to guaranteed rights and rights when making guarantee freedoms freedoms accounting decisions Economic Efficiency Maximize output and level of Economic efficiency Accountants must profitability understand the cost of inaccurate financial statements Distributive Justice Never implement a course Those individuals who are Inaccurate financial of action that harms the less disadvantaged should be statements can harm powerful guaranteed a social contract society Contributing Do not try to obtain self- Follow the rights of liberty Accountants need to Liberty fulfillment that results in within the limitations protect the interests of the disruption of the rights established by laws the public by their actions of others so the rights of the public are not violated TABLE 4.1 How Different Ethical Perspectives Affect Accounting-Based Decisions Ethical Perspective Summary of Ideas Driving Value Accounting Application Self-Interest Everyone in society would Personal self-interest Self-serving bias drove be better off if each the scandals at Enron and individual could pursue his WorldCom self-interests Utilitarian Beliefs A law is right if the Greatest good for the Could be a huge gap benefits to society are greatest number between short-term and greater than the harm long-term benefits Personal Virtues Individuals must adopt a Other people should be Virtues of courage set of values that support given acceptable treatment and integrity protect virtuous behavior accounting's credibility Religious Individuals need compassion Need to have reciprocity Apply the Golden Rule to Injunctions and kindness as well as and compassion accounting decisions truthfulness and temperance Government Fundamental rules are Laws represent the Government regulations Requirements developed from agreed-on minimum standards of and accounting Standards central authorities morality for society set the rules for accounting Universal Rules Inspired rules dictate action Rules will be used to Rules and principles must for the greater good eliminate the self-interests be integrated to control of those making the self-interests decisions Individual Rights A summary of rights Protect each individual's Focus on stakeholders that can be agreed on to guaranteed rights and rights when making guarantee freedoms freedoms accounting decisions Economic Efficiency Maximize output and level of Economic efficiency Accountants must profitability understand the cost of inaccurate financial statements Distributive Justice Never implement a course Those individuals who are Inaccurate financial of action that harms the less disadvantaged should be statements can harm powerful guaranteed a social contract society Contributing Do not try to obtain self- Follow the rights of liberty Accountants need to Liberty fulfillment that results in within the limitations protect the interests of the disruption of the rights established by laws the public by their actions of others so the rights of the public are not violated