Business Ethics–Creative Accounting and Enron

December 20, 2010

enronOk, here’s the deal. By the 24th of December I have to hand in a suggestion for the final paper that I need to prepare for my Business Ethics class. The suggestion needs to include:

1) The subject of the paper (Creative accounting and Enron – maybe something about “where’s the limit” in accounting creativity, using Enron as an example, maybe trying to define the moral reasons to the Enron scandal, maybe something about the Arthur Andersen firm and the issue of auditor independence)

2) The research question / assumption (Haven’t decided yet)

3) Chapters of the paper and what will be in each (heeeeeelp!)

4) Bibliography. I must use at least five, of which at least 3 must be written in the last 5 years, and at least 2 must be from a leading professional international business-ethics journal. (I’ve found 2 articles in “Business Ethics Quarterly” that seem relevant: “THE STRUCTURAL ORIGINS OF CONFLICTS OF INTEREST IN
THE ACCOUNTING PROFESSION” by Colin Boyd, 2004 and “THE PHILOSOPHY AND RHETORIC OF AUDITOR INDEPENDENCE CONCEPTS” by Sara Ann Reiter and Paul F. Williams, 2004. I also found an article in Harvard Business Review “Why Good Accountants Do Bad Audits” by Max H. Bazerman, George Loewenstein, and Don A. Moore, 2002, and from Business and Society Review “The Ethics Officer as Agent of the Board: Leveraging Ethical Governance Capability in the Post-Enron Corporation” by W. MICHAEL HOFFMAN AND MARK ROWE”.  I am looking for at least 2 more sources – and they must all be from 2006 or later… any ideas?)

5) I need to present the ethical/philosophical theoretical models that I will use. Things I learned in this class. That will be easy. Just reading about the enron case gives me a thousand ideas.

So, now I’m turning to my readers. Who  can help me? No, I’m not asking you to write it for me. But if you have any useful suggestion of how to focus this thing, where to look for more sources and how to go about this. I need to hand in this final suggestion by December 24th, and the paper is to be done by January 28th.

Help me…? Pretty please…?



  1. Hey dude! Not really my area of expertise. I do business ethics but more through a lens on impact on society and environment. I don’t really focus on accounting. However, maybe the following could be of some help?

    1. An interesting subject could be on the fine line between creative accounting to shift tex burdens, get tax breaks etc vs creative accounting that is trying to hide company losses or inflate financial figures because of shareholder expectations, etc. It’s a fine line but the one tries to maximize the return to investors while the other will try to dupe the investor. Alternatively you could focus on the auditor and the role of the auditor – is it to audit the figures or is it to help the company? This is where conflict of interest comes in.

    2. The research question/assumption could be either about auditors and their responsibility towards shareholders vs company or focus on the conflict of interest. Or you could do a comparison between different systems/requirements in two different countries and argue it would be less likely to happen in country X.

    3. How long must the paper be? Chapters could include (if you go down the conflict of interest line):
    a. The role of auditors.
    b. The rise of conflict of interest (via expansion of services outside auditing)
    c. Too many masters of auditors (shareholders, company etc)
    d. Moral dilema or business practice?
    e. Incentives for creative accounting fraud – shareholder expectations, executive compensation, quarterly reporting (raising short term expectations), accounting firms and mutiple services they offer etc.
    f. Rules of engagement in different systems (2+ country companrison)
    g. Lack of indepth and clear global system.
    h. Potential way forward.

    4. Can’t help you here with bibliography. Have you tried looking at some of the institutes at universities or even at some of the accounting firms and the papers they deliver? Also try some of the business associations in major countries (UK, US, Germany etc). The EU should have some resources in one of their many departments. Lastly, try places like World Economic Forum, World Business Council for Sustainable Development, and other international forums.

    Hope it helps! Not really my area of expertise though… Sorry!

  2. Wow, thanks a lot! You’ve definitelly given me some thought directions.

  3. A pleasure! I am merely here to be your humble servant, sire.

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