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After Enron: How Accounting and SEC Reform Can Promote Corporate Accountability While Restoring Public Confidence

August 2002

Citation: ELR 10965

Author: Michelle Chan-Fishel

The recent bankruptcy of one-time energy giant Enron Corporation and its impact on the lives of employees and investors has spawned no less than six congressional investigations, four government probes, and countless news articles, editorials, and kitchen table discussions on the nature of corporate responsibility, governance, finance, and accounting. The Enron collapse, which has been described as "a landmark scandal of American business,"1 may prompt major overhauls in many areas of economic life, including accounting practices, retirement saving, and corporate governance.

While many policymakers and analysts are focused on finding solutions that directly address some of the most out-rageous aspects of the Enron case—for example, barring corporate executives from selling company stock while employees are prohibited from doing so—others are seeking ways to address broader problems such as auditor independence. Still others are exploring more radical structural changes to the way we conduct our economic activity, tapping into the increasing sentiment among the American public that the Enron story, "with its Shakespearean themes of greed, ambition and arrogance,"2 tells of how Big Business' unchecked power and greed can create misery for ordinary people.

Michelle Chan-Fishel coordinates the Green Investments program at Friends of the Earth—U.S., which advances corporate accountability and responsibility through leveraging the power of financiers and capital markets. Friends of the Earth—International, is the world's largest federation of national environmental organizations, with member groups in over 60 countries. Chan-Fishel gratefully acknowledges the assistance of David Waskow of Friends of the Earth—U.S. for contributing to this Article.

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