ABSTRACT
This chapter discusses legal and ethical issues faced by both the firm as a legal entity and by the managers who run the firm. Numerous financial and accounting scandals are discussed where the firm’s managers failed to follow legal or ethical practices, in order to appreciate the outcomes resulting from their decisions. The 2008 financial crisis is discussed at length, as well as the resulting recovery (now known as the Great Recession), and the legal and ethical decisions that preceded them. The use of debt and the misuse of risk are identified as factors that can turn a bad situation into a debacle.
