LONDON -- The Enron affair has made it impossible to justify boasts about the effectiveness of corporate governance in the United States and the reliability of independent accountancy firms.
The Enron scandal has not just meant that shareholders and creditors have lost heavily. It has had a serious impact on the company's employees, not merely in costing them their jobs but also by destroying much of their pension fund, which, with management's encouragement, was heavily invested in Enron shares. Top managers, meanwhile, had cashed in their share options when the going was good perhaps because they knew they could not rely on the firm's profit statements.
The connections between Enron and the politicians have yet to be fully revealed. When politicians refuse to release the relevant documents for whatever valid or invalid reasons suspicions of malpractice inevitably increase. The whole Enron affair stinks and has inevitably led to questions about the accounts and political connections of other allegedly profitable companies.