1.

Background
Enron Corporation is one of the largest companies in the world whose earnings
reached $ 101 billion in 2000 The company conduct business in the field of energy and
telecommunications. Enron was ranked seventh company of five hundred largest companies in
the United States, had a golden era in 2000-2001 and went bankrupt the following year. Enron
scandal that occurred in a very complex and occur systematically, ranging from fraud,
corruption, to be associated with the White House. Irregularities have came after major scandal
involving Arthur Andersen Firm in late 2001, it was fraudulent accounting scandal systematic,
institutionalized and well-planned. Scandal is very broad implications of the global financial
markets are marked by the fall of stock prices in various world stock exchanges.
At first Enron always looks good by continuing to record earnings in the financial
statements, the result is many people who invest by buying shares of Enron so that the price of
Enron stock price continues to climb up at $ 90 per sheet and then plunged to 45 cents within a
period of a few months only. Enron initially only engaged in the energy and gas industry, in the
context of a natural gas pipeline in the State of Texas, then moves into a global company in
recent years and is widely diversified and there is no relation to energy.
2.Skandal.
Enron crimes committed very well planned and involves many parties including the
Enron Board as the main actors and the firm of Arthur Anderson as auditors who conduct
cooperation in the largest corporate fraud scandals in the United States. Enron scandal becomes
very interesting when involves millions of dollars in campaign contributions to Bush, U.S. Sen.
Phil Gramm and other members of Congress. The cozy relationship between the Bush White
House and Enron enabled Kenneth L. Lay, then Enron's CEO, to meet in secret with Vice
President Richard Cheney to help mold the nation's energy policy. Bush's presidential campaign
received $1.14 million from Enron. Enron relationship with the presidential campaign funding
caused a lot of suspicion in the American public, Enron got special treatment by the government
as a regulator of regulation in the energy business and corporate rescue process.
Enron over the years has made the practice of Window Dressing, The manager has
been manipulated (mark up) Enron's revenues amounted to US$ 600 million and hid its debts
totaling US$ 1.2 billion. Mark up at this amount certainly cannot be done easily, this

manipulation required expert tricks to hide the high number. In other words, this is a high-level
collusion between Enron, financial analysts, legal advisors, and auditors.
Andersens dismal performance as a financial watchdog has led to a wave of proposals
to reform the accounting business, including a truly independent system of oversight. The big
firms have finally acknowledged that it is not a good idea for auditors to serve as management
consultants for the same clients (as Andersen did for Enron) or even to serve as both internal
and external auditors for the same company . Arthur Andersen also has a policy of destruction of
documents that do not become a formal audit worksheet. Although the destruction of these
documents in accordance Andersen's internal policies, but this case is illegal and causes Arthur
Andersen reputation was ruined . The impact was in 2002, the Licenses of Certified Public
Accountants surrendered after being found guilty and is involved in the Enron scandal and led
to 85,000 people lost their jobs.
3.Business Ethics Perspective
The bankruptcy of Enron has harmed many parties, not just the investors and the
public, but the employees of Enron. Enron employee pension funds also invested in company
stock. Andersen as a CPA has hurt the the trust of the stock holder to provide a fairrness
information about the accountability of the agent in carrying out the mandate of the principal.
Enron also has acted rationally for the benefit of himself with no regard to the norms and
business ethics.
From the Enron Cases above, it can be connected with the existing theory of ethics,
such as from the standpoint of Teleology, Deontology, and Utilitarian..

Teleology Theory
teleological from Greek telos, end; logos, science, theory of morality that derives
duty or moral obligation from what is good or desirable as an end to be achieved . At
Enron case can be clearly perceived how Enron to manipulate their financial
statements to investors to attract investors as much as possible. Enron did not think
about the effects that followed, Enron justifies any means to obtain substantial funds.
But in fact Enron goal is not achieved, it can be concluded that Enron's unethical on
this theory.

Deontology Theory

Deontological ethics in philosophy, ethical theories that place special emphasis on the
relationship between duty and the morality of human actions. Deontology
(Greek deon, duty, and logos, science) consequently focuses on logic and ethics.
No attempt is made in such theories to explicate specific moral obligations. In
deontological ethics an action is considered morally good because of some
characteristic of the action itself, not because the product of the action is good.
Deontological ethics holds that at least some acts are morally obligatory regardless of
their consequences for human welfare. In the above case, Enron boards should run the
company in accordance with the code of ethics and comply with existing regulations.
In fact Enron as a business executive tempted to deviate,so Enron motivated to take
any action in order to take them a big benefit. Likewise Arthur Andersen, they are
tempted offer from the Enron so easily give false information about the financial
statements, it is clear that the case is not ethical.
Utilitarian Theory.
According to this theory an act is good if it brings benefits, but the benefits it must
involve not just one or two people, but communities as a whole. Criteria for
determining good and bad an action is "the greatest happiness of the greatest number",
the greatest happiness of the greatest number of people. Enron did insider trading,
which company officials (board of directors, executive director and non-executive
director) permits all transactions based on information that can only be accessed by the
certain people in the company, which means that Enron could not provide benefits to
many parties, only one parties who benefited so this theory can't be fulfilled.