Question

Did the financial institutions Arthur Anderson and the attorneys contributed to unethical behavior at Enron? Was there a diffusion of responsibilities whereby the executives at Enron told themselves that their behavior was okay because the bankers Arthur Anderson and the lawyers knew what they were doing?

Answer 1

1. Yes, there was gross unethical behavious at Enron on the part of their auditors and attorneys. In such a big organisation like Enron it was not possible to keep committing a wrong doings in the financial without the involvement of external enablers.

Though there can not be any standard defination of unethical behavious, but yes, factors like not performing duty as per the law, not following code of conduct and involving in suspicious activies all constitute to be unethical behaviour. Thus it would not be wrong to say that  financial institutions Arthur Anderson and the attorneys contributed to unethical behavior at Enron. These 3 are the external pillars of every organisation and it is highly unlikely that none of them suspected anything

2. There can be arguments like whether it was diffusion or whether it was pressure to retain the big client like Enron with them by way of finding ways & loopholes to window dress the wrong doings. In my personal opinon based upon reading of the case, I dont believe there was any diffusion but illusion from the side of management to keep them in the loop that what they are doing is as per law and are temporary in nature.