ABSTRACT
In recent years it has been nearly impossible to open the newspaper or turn on the news without learning about another corporate scandal. Enron, WorldCom, Tyco, and HealthSouth are just some of the major U.S. and multinational corporations whose corporate and accounting practices have made the news. As a frontrunner in this new corporate landscape, Enron has forever altered public trust in corporate morality (Sethi, 2002). In the words of the American Institute of Certifi ed Public Accountants (2003):
The media frenzy on Enron seemed to come from nowhere. Suddenly, every major daily and broadcast news program was talking about Enron…. The result has been…a severe blow to the public’s confi dence in the capital markets…. Many employees lost their life savings and tens of thousands of investors lost billions. (¶1-3)
Corporate scandals have not only threatened the reputation of the involved fi rms but also provoked critical doubt in the legitimacy of corporations in general. A persistent problem organizations face is their standing and relationship with a variety of stakeholders. Ethics, accountability, and corporate responsibility are now expected by the public, investors, and the government.
