Financial Statement Analysis Report: Ethical Breaches and Stakeholders

This report provides an analysis of financial statements, focusing on ethical breaches within the context of financial reporting. It highlights the significance of business ethics and the impact of unethical practices, using the Enron Corporation scandal as a primary example. The report discusses the manipulation of accounting rules and its consequences, emphasizing the importance of ethical conduct in financial reporting. Furthermore, it explores the importance of financial reporting for stakeholders and the public, emphasizing the need for accurate, transparent, and complete financial information. The report references the role of stakeholders in financial analysis and reporting, underlining the need for scrutiny to ensure accountability and trust in financial information. The report concludes by underscoring the critical role of ethical considerations in maintaining the integrity of financial statements and the decisions that are based on them.

Running Head: FINANCIAL STATEMENT ANALYSIS
FINANCIAL STATEMENT ANALYSIS
Name of the Student
Name of the University
Author Note

1FINANCIAL STATEMENT ANALYSIS
Ethical Breaches
Business ethics is the study as well as the practices and it in the form of the applied
ethics or the professional ethics, which helps in examining the ethical principles as well as
moral or the ethical problems, which arises in the business environment. It is applied to all
the aspects of the conducts of the business and it is relevant for the conduct of the individuals
as well as entire organizations. The recent major ethical breaches of recent past, which have
led to increasing of the scrutiny in the field of financial reporting as well as analysis is of
Enron Corporation. It was the American energy company that is based in Houston. The
scandal of the company has led to the bankruptcy of the corporation as well as dissolution of
largest accountancy and audit partnership, Arthur Anderson around the world. The failure of
the company during 2001 has represented major failure as well as it was one of the biggest
bankruptcy of the business organization, which have highlighted the moral failings of
corporate in America. Enron Corporation’s downfall as well as the imprisonment of the
several group of leadership was shocking and has violated the ethics. The misplacement of
the morals has killed the company and has injured everyone that has involved with the
company. The company was charged with manipulating knowingly the accounting rules and
they were indulged in masking enormous losses and the liabilities of the company (Su, 2014).
Moreover, there has been major changes in the way business organizations helps in
managing and minimizing the risk. It is vital for every business organization. They develops
the strategy, which are used by organizations for the minimization of the risk. Therefore,
business ethics plays vital role for the moral judgements of the business organization. The
decisions that are taken in the business organizations is influenced by the practices and
culture of the organizations. Hence, the organizations should maintain the business ethics by
following the code of conduct (Ailon, 2015).

2FINANCIAL STATEMENT ANALYSIS
Importance of Financial Reporting for Stakeholders and Public at large
The financial reporting is that standard practices, which gives the stakeholders the
accurate depiction of the finances of the company that includes expenses, revenues, capital,
profits and the cash flows as the formal record, which provides the deep insights into the
financial information. It is the world of changing accounting as well as reporting landscape
provides the challenges for the companies for responding to the conditions of global market
as well as reporting the financial results with facing the increased scrutiny from the ranges of
the stakeholders (Müller et al. 2014). The foundation of the ethics of the financial reporting
has derived from needs for holding the managers of the organization accountable for the)
achievement of the objectives and goals of the investors. The stakeholders of the company
takes the reports presented by the preparers and auditors of the financial statements as truth.
They depend on the timely, transparent as well as complete financial information. Therefore,
scrutiny of the financial analysis and reporting is essential and important for the stakeholders
of the firm and the public at the large (Lawrence & Weber, 2014).

3FINANCIAL STATEMENT ANALYSIS
Reference
Ailon, G. (2015). From superstars to devils: The ethical discourse on managerial figures
involved in a corporate scandal. Organization, 22(1), 78-99.
Lawrence, A. T., & Weber, J. (2014). Business and society: Stakeholders, ethics, public
policy. Tata McGraw-Hill Education.
Müller, R., Turner, R., Andersen, E. S., Shao, J., & Kvalnes, Ø. (2014). Ethics, trust, and
governance in temporary organizations. Project Management Journal, 45(4), 39-54.
Su, H. Y. (2014). Business ethics and the development of intellectual capital. Journal of
Business Ethics, 119(1), 87-98.