The Enron scandal caused a Wall Street fraud crisis that shook the market to its core in 2001, immediately after the Asian crises of 1997-1998, the DotcomBubble, and 9/11. Since then, scandals such as those involving Lehman Brothers and WorldCom in 2007-2008, as well as the Great Recession, have surpassed it, however Enron remains one of the most major accounting fraud cases. Despite the fact that the financial sector had been highly regulated by the early 2000s, energy deregulation allowed corporations to speculate on future prices. At the height of the dotcom bubble, Enron was heralded as a star invention, but as the bubble broke, Enron’s plan to build high-speed internet failed, and investors began to lose money. Furthermore, the financial losses of the activities were concealed by using market to market accounting rather than book value, as well as special purpose organisations to conceal debt. The root of the problem was shown to be a corporation with a poisonous corporate culture that prioritised officer salary over social responsibility, resulting in poor leadership. Is it feasible, then, that when money rises in a ‘irrationally exuberant’ era, ethical accounting methods, social responsibility, and ethics all become poorer goods? This study also speculates on the potential that ethics, social responsibility, and ethical accounting are inferior commodities, citing evidence from business cycles and financial crises.
I. J. Akpanebu
Department of Quantity Surveying, Akwaibom State polytechnic, Ikot Osurua, Ikot Ekpene, Nigeria.
T. S. Olu-gbo
Department of Project Management and Technology, Federal University of Technology, Owerri, Nigeria.
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