another person’s rights. Generally, there are two categories of rights: (1) natural rights- rights that exist independently of any legal obligations, often known as human rights and (2) Legal rights and contractual rights- rights that are respected due to social agreement. Amongst natural rights, the right of truth is the most significant in the function of accounting. The clients who request financial statements have the right to be provided with truthful and accurate financial information in order to make choices in constructing financial strategies. This right enforces a moral obligation on the accountants to produce legitimate and objective/true financial statements. On the other hand, legal and contractual rights are well-regarded in the relationship between accountants and employers and between accountants and clients. These contractual relationships mean that employers and clients have a legal right to expect professional and competent service from the accountants. Accounting scandals Enron Enron's bankruptcy in December 2001 provides a significant example of the issues of trust in accounting. Golden era of Enron In 1985, Enron was formed by Kenneth Lay merging the natural gas pipeline companies of Houston Natural Gas and InterNorth. From 1990s to 1998, Enron's stock increased 311% percent which was only slightly higher than the average growth. Then the stock increased by 56% in 1999 and a further 87% in 2000. By December 31, 2000, Enron's stock was valued at $83.13. In addition, Enron was rated the most innovative large company in America in Fortunes Most Admired Companies survey. Downfall August 22, 2001 – Sherron Watkins gives Kenneth Lay a six-page letter further explaining Enron's accounting issues. October 16, 2001 – Enron announces a third quarter loss of $618 million. October 31, 2001 – The SEC opens a formal investigation into Enron's transactions. November 9, 2001 – Enron and Dynegy announce the $7.8 billion merger agreement. It would form Dynegy Corp, in which Dynegy would own 64% and Enron 36%. November 28, 2001 – Dynegy announces it has terminated merger talks with Enron. December 2, 2001 – Enron files for Chapter 11 protection, becoming the largest bankruptcy in U.S. history at that time and leaves thousands of workers with worthless stock in their pensions. See also Philosophy of Law Philosophy of Economics Utilitarianism Ethics International Accounting Standard Board International Financial Reporting Standard Enron Scandal Technocrat Pragmatism Jeremy Bentham Human right References Accounting scholarship