Accounting Theory and Issue - PDF

Running head: ACCOUNTING THEORY AND ISSUE
Accounting Theory and Issue
Name of the Student:
Name of the University:
Author Note

2ACCOUNTING THEORY AND ISSUE
Table of Contents
Introduction......................................................................................................................................3
Background of the company............................................................................................................3
Accounting Issue.............................................................................................................................4
Conceptual Framework....................................................................................................................5
Critical Analysis..............................................................................................................................6
Share price graph.............................................................................................................................8
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

3ACCOUNTING THEORY AND ISSUE
Introduction
The issue that has been presented in the question refers to the fact that the corporate
organizations have to face accounting issues in the due course of business. This means that a
firm might be subjected to fraudulent activities and the absence of the proper internal controls in
the corporate entity will result in the corporate organization going bankrupt. This particular study
focuses upon one single corporate entity and the fraudulent or the scandalous activity that led to
its downfall.
The firm that has been chosen for the purpose of the study is of the name Osbidian
Energy and is located in Canada. Previously Known as Penn West Exploration Ltd, Osbidian
Energy is a Canada based oil and natural gas production company. It is headquartered in
Calgary, Alberta. Founded in 2005, till date it has over 300 employees. Going back to the
history, being founded as Penn West Exploration Ltd, it operated its business in 30 areas,
employing over 2000 employees with 15 executives. But after it changed into Osbidian Energy,
it just has 300 employees with only an executive team of five members.
This particular study aims to look into the internal operations of the corporate entity and
analyzes the accounting statement of the organization in order to ensure the fact that the
reporting framework has d been prepared in accordance to the general purpose reporting
framework.
Background of the company
The Calgary based Obsidian Energy Limited had been previously known as Penn West
Exploration Ltd, Penn West Petroleum and Penn West Energy Trust. The corporate organization
has its headquarters in western Canada. The oil fields that from where the energy resources have
been derived are located in the three key areas of Alberta that are Pembina Cardium, Peace River
oil sands and Alberta Viking. The total production of the corporate entity ranges between 31,000
bbl on a daily basis.
It can be further noted here that the corporate entity had been a member of the Toronto
Stock Exchange. The company had faced financial difficulties in the financial year of when the
prices of the crude oil fell significantly. This had led to a major restructuring of the corporate
entity. Moreover, it had been reported that the corporate entity had sold most of its assets over