Whistleblowing and Accounting Theory: A Case Study of Barclays

This assignment reflects a brief concept of whistleblowing within an organization. A case study of Barclays has been taken into consideration, wherein the CEO of the company decided to expose the whistleblower. The study highlights the major factors regarding whistleblowing and its effect on the company. It also focuses on accounting theories related to the CEO's behavior and accountability.

Running head: ACCOUNTING THEORY
Accounting Theory
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Abstract
This assignment intends to reflect a brief concept of whistleblowing within an organization.
Thus, in this context, a case study of Barclays has been taken into consideration, wherein the
CEO of the company decided to expose the whistleblower. Thus, in order to obtain the
relevant information, the study has used secondary sources. Thus, based on the case scenario
and relevant information gained from the secondary sources, it can be stated that it is
unethical to expose the whistleblower for which the respective CEO was penalized in
monetary terms.
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Table of Contents
Abstract......................................................................................................................................2
Introduction................................................................................................................................4
Facts of the Case........................................................................................................................4
Whistleblower........................................................................................................................5
Reasons behind the Exposing Whistleblower............................................................................5
Accounting Theory Related to the CEO’s Behavior..................................................................6
Accounting Theory Related to the CEO’s Accountability.........................................................7
Compare, Contrast, and Evaluation of three theories................................................................7
Conclusion..................................................................................................................................8
References..................................................................................................................................9
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Introduction
This study mainly focuses on a case study, wherein an organization named Barclays faced the
issue of whistleblowing within the company. The issue was mostly related to financial
constraints. It was observed that the CEO of the company tried to expose the whistleblower,
as the company disclosed some important information its financial transactions (Parker,
Guthrie & Linacre, 2011). Generally, the whistleblower is a referred to as a person, who is
responsible for disclosing organizational information about a company in an unlawful
manner. In the context of the case related to Barclays, a person namely Mr. Staley has
conducted this kind of activity. Thus, the company was penalized by the Financial Conduct
Authority (FCA) in the UK. The objective of this study is to highlight the major factors
regarding whistleblower and its effect on the company. At the same time, certain theory
related to the finance and its implication on different organizations has also highlighted the
study. In addition, the study also focuses on how theories have implemented by the CEO of
Barclays.
Facts of the Case
On the basis of the case scenario, it has been identified that the Financial Executive Director
of Barclays informed to the CEO that whistleblower plays a vital role within an organization.
It helps in determining the major faults in the financial aspects of the company. Thus, due to
this reason, the CEO of the Barclays Company has conducted the process of whistle blowing,
whereas the FCA in the UK was observed unlawful activities within the organization. Thus, it
was observed that the CEO of the company was fined £642,430 for trying to uncover the
name of the whistleblower. However, the auditors of the FCA found that the company
maintains a completely different financial statement in respect of their published financial
statement (Morris & Glover, 2018). In this context, it was observed that the company was
caught for their improper financial management. However, Mr. Staley stated that he was not
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involved in the incident regarding the financial mismanagement in the company. After
Stanley’s statement of involvement, the auditors of FCA and Prudential Regulation Authority
(PRA) conducted a process of scrutiny, wherein both the authorities observed that the fines
were appropriate. In addition, it was also found that the CEO, CFO, and other higher
associates were responsible for the incident. Hence, inappropriate financial management can
be considered as the main reason behind the incident that took place in the Barclays (Morris
& Glover, 2018).
Whistleblower
A whistleblower can be defined as a person, who is often responsible for disclosing certain
information within the organization, which is illegal or unethical in nature. Through the
process of whistleblowing, an organization can easily find out the internal faults regarding the
business operations (Booth, 2018). Hence, it can be claimed that the higher authorities of an
organization are able to take a reasonable decision through the process of whistleblowing.
Thus, on the basis of the provided case scenario, it has been identified that Mark Steward,
who is the director of the organizational marketing and enforcement division of Barclays
stated that the CEO of the company conducted whistleblowing process. This was with the
purpose of determining organizational faults relating to its finance. Hence, the CEO of the
Barclays Company tried to uncover the internal whistleblower in this case scenario. However,
the CEO of the company was fined for his actions with respect to the whistleblowing issue
(Nandwa, n.d.).
Reasons behind the Exposing Whistleblower
Based on the overall reviewing the case study, it has been observed that recognizing financial
disputes within the organization is the key reason behind the conduction of whistleblowing
procedure. However, finance plays a major role in any organization, as without it, a company
cannot measure its cash flow, profit, loss, income, expenditure, assets, and liabilities among
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others. Hence, it is mandatory that an organization must focus on the finance along with its
proper management (Jansen, 2018). In this case, the CEO of Barclays wanted to measure and
find out the major financial disputes within the organization so that the overall organizational
performance can be enhanced. Thus, owing to this particular reason, the company took help
from FCA and PRA. Based on the above observation, the financial background enhancement
can be considered as the main intention for why the CEO of Barclays Company tried to
unmask the internal whistleblower of the organization (Fagbemi, 2017).
Accounting Theory Related to the CEO’s Behavior
The CEO is considered as a vital aspect of any organization and can be described as a
significant character. This is due to the fact that he/she is responsible for the purpose of
running all the activities within the company. Within the case, the CEO of Barclays took
decision for revealing the whistleblower of the company, which led towards his penalization.
Hence, ‘Decision-Usefulness’ Theory has been taken into consideration for the purpose of
analyzing the behavior of the CEO in the process of unveiling the whistleblower (Vollmer,
2018). On the basis of this theory, the CEO of Barclays Company focused on communicating
with his subordinates, especially the security team of the bank to find the whistleblower in the
company (Fieger, & Rice, 2018; Ruddick & Kollewe, 2017). In the case of accounts, the
CEO implemented certain decisions regarding the accountability so that the internal
accounting system can be operated effectively. This kind of behavior of a CEO can develop
organizational performance in an efficient manner. However, this theory has worked properly
in the case but the outcome was reflected to be negative for the organization (Fieger, & Rice,
2018).
Whistleblower behavior of a CEO can be considered as a part of planned behavior. Hence,
the theory of planned behavior is can help in identifying the adequacy of CEO’s decision
regarding Barclays. Through the process of planned behavior, an organization can prepare an
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operational map, which assists it to develop organizational performance within the market
(Jansen, 2018). In this context, the theory has reflected that the higher authorities of the
organization must focus on a single attitude, subject, and behavior. Based on these factors, an
intention has been developed, which led the organization towards the right behavior. In this
case, the CEO of Barclays Company has been emphasizing the organizational finance.
Hence, they have centralized their focus on the disputes regarding the financial faults within
the organization. It leads the company to make maintain the confidentiality of the
whistleblower. In addition, it can also help the company to identify the malpractices or
unethical activities (Fagbemi, 2017).
Accounting Theory Related to the CEO’s Accountability
In order to conduct an appropriate financial activity, the higher associates must implement
Accounting Structure theory within the organization. The theory reflects the traditional way
of practicing accounting. In this, the golden rule of accounting is to be followed properly.
Each of the transactions must be recorded in the journal. After the recording, each data is to
be transferred into the ledger in order to conduct trail balance (Nandwa, n.d). After this, the
profit and loss account needs to be prepared for the purpose of developing a balance sheet of
an organization. Apart from this, there exists numerous process of accounting, which is to be
followed by the CEO of an organization, while developing a financial statement with the help
of experts. Thus, in the context of Barclays Company, the CEO of the organization is unable
to conduct proper accountability within the organization, which initiates the issue of
uncovering whistleblower (Slacka & Tsalavoutasb, 2018).
Compare, Contrast, and Evaluation of three theories
After analyzing the three theories, it has been identified that CEO’s behavior can be
considered to be important for an organization. This is due to the fact that it leads the
organization to behave in an adequate manner. On the other hand, the process of
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whistleblowing is not a lawful activity for an organization. Hence, the intention of
whistleblowing can affect the business operations both positively as well negatively. Thus,
with respect to CEO’s accountability, it can be stated that it entirely depends on the
organizational financial experts. This is mostly because the CEO of an organization is aware
regarding the basic accounting terms but the complex accounting terms may not be
examinable by the CEO (Matthew, Paul, & Donna, 2018). Hence, chance avoidance is higher
in this kind of situation. Hence, the CEO of an organization must develop skills regarding
accountability so that the organization can perform appropriately. Based on the above
observations, it can be stated that a CEO of the organization such as Barclays must focus on
the behavior of finance. At the same time, he must aware regarding the consequences of
disclosing the whistleblower. Simultaneously, he must also be aware of the financial
terminologies so that the organization can operate properly. Any wrong decision regarding
any of the abovementioned theory can lead an organization to incur a loss in the respective
market (Malik & Nawaz, 2018).
Conclusion
Based on the overall study findings, it has been identified that the finance plays a major role
with respect to organizational development. Hence, any right and wrong decision relating to
finance can affect the organizational operation within its market. The taken decision can have
both negative as well as positive impact. Hence, the CEO of an organization must ensure that
no unethical activities are conducted on the organizational premises. It can further be
concluded that the CEO of Barclays ignored the theory of ‘Decision-Usefulness’, ‘Planned
Behavior’, and ‘Accounting Structure’, which resulted in the overall incident in the
organization. At the same time, the decision regarding whistleblowing can also be considered
to be wrong, as they did not examine the internal financial defaults by own, which resulted in
the penalization of the CEO.
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References
Booth P., 2018, ‘Management control in a voluntary organization’, Accounting and
Accountants in Organizational Context, Vol. 16, pp. 3-191.
Fagbemi, T. O., 2017, ‘Whistleblowing intention: Evidence From future accountants in
universities located in Kwara State, Nigeria’. Osogbo Journal of Management (OJM), Vol 2,
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Fieger, P., & Rice, B. S., 2018, ‘Whistle-blowing in the Australian public service: The role of
employee ethnicity and occupational affiliation’, Personnel Review, Vol. 47 Iss. 3, pp. 613-
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Jansen, E. P., 2018, ‘Bridging the gap between theory and practice in management
accounting: Reviewing the literature to shape interventions’, Accounting, Auditing &
Accountability Journal, Vol. 31 Issue. 5, pp.1486-1509.
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intention among bank employees: Mediating role of psychological safety’, Review of
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expose whistleblower, Whistleblower, viewed 20 September 2018,
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