Question

Think about the following statements by or about the former CEOs of companies that had accounting fraud: Ken Lay from Enron; Bernie Ebbers from WorldCom; and John Rigas from Adelphia: “Enron was an enormous corporation. How could I have known everything going on everywhere in the company?” “You have to rely; you have to trust people. You have to believe. You have to delegate ...signed off on the information based on what was provided to me. And what I was told.” “Bernie Ebbers did not know about the accounting decisions of Scott Sullivan to reassign billions of dollars.” “John Rigas had a right to trust and rely on professionals and his own staff to get the financials right.” Before you respond, make sure you read and cite to the "Discussion Board Links" I have provided under the "Required Resources" section of this week's materials under "Modules." Start by describing who these three individuals are and what exactly happened in each of their situations.

Then answer ALL of the following questions:

Are the CEOs responsible for knowing what goes on at their companies?

Are they able to find out what is happening?

Are they criminally responsible?

Are they ethically responsible?

Answer 1

These three named Ken Lay, Bernie Embers and John Rigas are the CEO from the different companies. In situation of every CEO, they are held liable or responsible for the accounting fraud, on which they are somewhere liable (they are not responsible criminally).

Explanation:

CEOs of the company are those who are entrusted with the responsibility as well as accountability of the whole operations if the company or business, and they are also held responsible for any wrong or fraud or mislead doing or happening at the company.

Though, the CEO are not totally or wholly responsible or liable for all the wrong doings which is happening in the company since it is certainly not possible for one person to have the all information for whatever happening or occurring in the company. The reason behind all this that the CEO relies on the directors team and other employees who are reporting to him over the performance of the company.

So, they can not be held responsible criminally always until they are involved in the fraud or wrong doing of the action of the company and have influence the decisions which are unethical.

The CEO are certainly ethically responsible or accountable and need to promote the ethics of the company.