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Enron Oil Scandal

            The topic that I have chosen to discuss is the Enron Oil Scandal and the decision that Sherron Watkins made to blow the whistle on the accounting fraud that she uncovered.
             I will discuss how the Utilitarian moral theory relates to this case and why I believe Sherron made the right choice.
             Enron was founded in July 1985 when two companies, Houston Natural Gas and InterNorth, merged. Kenneth Lay, an energy economist who had held academic and government positions throughout his career, became the chairman and chief executive. Enron was an ambitious company that aimed to be a global player in the world energy trading business and grew in quite a short time to become the seventh largest US company (as measured by share capital), employing twenty-one thousand staff in more than forty countries. The company was traded on the stock market and workers were encouraged to invest their life savings in the stock, assured by top management that there would be excellent growth and prosperity for years to come. Its share price collapsed when it emerged that the company had been concealing losses by setting up so-called "shell" companies. Most executives and top people in the company appear to have condoned these practices; however Sherron Watkins became the "whistleblower" in the Enron scandal when she wrote a letter to Kenneth Lay warning of accounting irregularities that could pose a threat to the company. She maintained that the executives, Andrew Fastow and Jeff Skilling were the instigators of the fraud and that Kenneth Lay didn't know the intricacies of what was happening. .
             Even more scandal followed when it was revealed that Anderson Consulting, a huge accounting firm, had advised Enron on how to conceal its losses on its balance sheet through the use of the "shell" companies. As the depth of the deception unfolded, investors and creditors retreated, forcing the firm into bankruptcy. .
             Many employees who took the advice of management and invested in the company lost all their hard-earned savings when the company's share price plummeted.

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