Watkins was the Enron vice-president whose emails to CEO Kenneth Lay in 2001 were used by investigators to highlight the complex accounting fraud at the company.
This week she urged companies to send a strong message to fraudsters.
‘For a company to have the right ethics and controls in place, it has to not just stop fraud, but find wrongdoers and try to identify individuals who are going to break the rules and fire them,’ she told Accountancy Age.
‘A penalty means you get a second chance and that’s the wrong message. That means “try not to get caught, but if you do, no worries, you get a hand slap and a second chance”.’
Companies that demonstrated leadership in this area would find ‘unethical employees will start to toe the line. If you penalise them and give them a second chance you have started the company down the wrong path. You have to make a decision as a business leader,’ she added.
Watkins also said that boardroom committees had a crucial role in dealing with wrongdoing and in supporting those who harbour concerns about financial practices. ‘I should have gone to the audit committee of the firm because they did do the right thing when they finally woke up. They did hire an outside law firm and an outside accounting firm.’
Last month, Enron filed a second amended Chapter 11 plan and disclosure statement with the US Bankruptcy Court. But it was confirmed this week that the hearings have been adjourned until 22 December.
It is not the first time the hearings have been delayed. The original reorganisation plan was filed in July. The plan still proposes paying most creditors about one-fifth of the approximately $66.4bn (£38.3bn) they are owed.
Last week, Enron sold its 50-storey landmark headquarters in Houston to local cardiologist Antonio Pacifico for $55.5m.
Mark McMullen joins the private client services team from Smith & Williamson
Merger between Clear & Lane Chartered Accountants and Magma Chartered Accountants was finalised on 3 February
BDO has taken its new partner intake to 23 during the first half of its financial year, including the appointment of five partners in five weeks
The firm reports 7.6% global fee income growth for the year ending 31 December 2016