In the documentary film Enron: The Smartest Guys in the Room examines the downfall

of the Enron Corporation. The film describes the corrupt business practices made by Enrons top
executives. Kenneth Lay founded Enron in 1985 and hires Louis Borget as the CEO. Louis
Borget is terminated after it is discover that they were making fraudulent trades nearly destroying
the company. Lay hires new CEO Jeffrey Skilling to lead Enron. Skilling decides to use the
mark-to-market accounting, which allows to record profits before they receive it. Therefore,
Enron appears to be a very profitable company even though its performing poorly. Lou Pai is
hired to as the CEO of Enron Energy Services. Pai does unethical practices such as using
shareholders money for strip clubs. In addition, Pai sells his stock after resigning the company
leaving with more than $250 million dollars. Elsewhere, Enron enters into the dot-come bubble
and continues to use market-to-market accounting to record fictionist profits. The success of
Enron becomes so popular that an investor and a newspaper reporter question the companys
profits. Bethany McLean, a Fortune reporter, asks Skilling a very simple question: How does
Enron make its money? Skilling avoids the question and accuses the reporter of making falsely
accusations. Later that year Skilling, resigns and sells $15.5 million of stock, brining stock sales.
The SEC begins an investigation after several accusations are made against Enron. Many people
lose their jobs, pled guilty, and one commits suicide. The former auditor Arthur Anderson LLP
surrenders its license to practice accounting. Both Lay and Skilling are convicted to conspiracy,
fraud, insider trading and false statements.
In conclusion, we learned from this three movies that we could be faced with any of these
ethical dilemmas in the business world. The people that perform unethically are eventually
discovered by regulators. Accounting professionals must follow the codes of ethics to portray a
true value of the company for shareholders and users.