What are the most significant implications of the Enron collapse for global corporate governance

Introduction

Enron, the seventh top company in the United States until 2001, it collapsed because its decision maker officers: the straits executive officer, the chief operation officer and the chief finance officer used the tool: the chronicle mensuration of market to market to accommodate the financial phenomena. Market to market is an accounting principle that the focus of its financial value is the demo market price; however, the Enrons free-living directors breakaway directors did non inspect the problem of the financial situation. Sarbanes-Oxley legislation highlights the responsibility of furrow directors to supervise accounting affairs; similarly, Smith, the Management Consultant from the U.S.A (2007) emphasized that to conform the financial phenomena is not for legal way. Sarbanes- Oxley legislation is a regulation for corporal governance. In Order to fill the rift between directors and accountants, independent directors have to work in audit committee, likewise, executive officers could not change the accounting standard to overwhelm up the financial problems. Therefore, the responsibilities of independent directors and choosing the disclosure and transparent accounting standard are important elements to manage a company.








The responsibilities of independent directors

Wallison, the codirector of American Enterprise institutes program on financial markets deregulation (2006) believed that independent directors is an important part of corporate governance .He stated that independent directors and the contortion of financial stipulation are problems in some companies. Cornfrod, the Bard college professor (2004, p.7) argued that independent directors failed to avoid the collapse of company at sometimes. These independent directors miss in their management job. Eichenwarld, the New York Times journalist (2003), cited in Hamon that independent directors intended to do insider trading and fraudful behavior. Independent directors, lacked of the...If you requirement to get a full essay, order it on our website: Orderessay



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