Without protection from this sort of corporate greed, American investors would be less inclined to invest at all. One can see the effects of just the one incidence of betrayal to investor confidence and the lack of funding in the energy sector following Enron's demise, to begin to appreciate what corporate scandal based on unethical dealings could have on investment. Investment dollars is the lifeblood to the American economy. Businesses would no longer receive the vital capital needed to grow and be competitive in today's hyper-competitive, increasingly globalized economy. Investment risks would take on a whole new meaning, evolving from risks associated with the business success to risks associated with whether or not the company is accurately reporting their financial positioning. This increase in risk would be unacceptable to most investors. Society demands honesty in disclosure and will accept nothing less. For this reason, stakeholders for this situation is anyone that is affected by the American economy, from corporate executives, to gas station attendants, to the children that these people must feed and support, to foreign entities that interact with American businesses in any way, shape or form. Should this problem not have been addressed, for the greed of the few, the entire American economy, as it currently exists, could collapse.

Recommendation:

For Enron, the damage had been too severe. There...

However, in addition to this atonement, steps were taken to prevent other organizations from being able to defraud the public as Enron had. The Sarbanes-Oxley bill was made law in the summer of 2002. No longer would external auditors be allowed to be employed by the corporate management. and, not only would balance sheets and final figures be audited but also the quality of financial controls and systems that were in place would be audited as well. No longer would firms be able to both consult and audit for an organization, as this is clearly a conflict of interest. but, Enron is a perfect example of how an organization can "misuse the very standards and principles that are supposed to protect the public's interests" (Kranacher).
Although it is through these new controls that Americans hope to never experience an Enron ever again, the SEC and the American public must remain watchful for the next Enron.

References

Kranacher, M. "Financial Statement Complexity: A Breeding Ground for Fraud." CPA Journal 76(9) Sept 2006: p. 80. MasterFILE Premier. EBSCOHost. University of Phoenix, Phoenix, AZ. September 27, 2006 http://web.ebscohost.com.

On the Side of Angels." Provided - No further reference details given.