In: Operations Management
i) What governance structures and systems failed and in what way?
“There is a need for regulation of our accounting profession. We
cannot afford a system, like the present one, that facilitates
failure rather than success. Accounting firms have public
responsibilities. We have had too many financial and accounting
failures…. While there are many facets of our system that need
repair, the potential loss of confidence in our accounting firms
and the audit process is a burden our capital markets cannot and
should not bear”
(Harvey Pitt, President of the US SEC).
In the wake of Enron Collapse
A) While the statement above was made in the context of the US, it
is equally true for many other countries, including South
Africa.
Answer: For the situation introduced, the administration framework that fizzled was the corporate administration framework which is essentially the action of having a legitimate harmony between the premiums of various gatherings, for example, government, investors, financial specialists, normal open, providers, clients, senior administration administrators, and numerous others. The instance of Enron is an ordinary case of how the individual covetousness of the top supervisors can bring about the breakdown of a multi-million association. In the organization named Enron, the administration was not keen on building a up interior control framework that cod investigate the enthusiasm of the association. Yet, all the top officials were increasingly keen on satisfying their very own ravenousness at the stake of authoritative interests, and this prompted the breakdown of Enron. This is for the most part because of the inadequate corporate administration quantifies in the United States.
This announcement is valid for everywhere throughout the world as without the powerful corporate administration framework, the financial and professional workplace of any nation won't be straightforward, and it will prompt the breakdown f numerous worldwide firms, and the administrators will attempt to advance their personal matters as opposed to working to benefit the organization and the partners.