Financial Accounting Report on Stakeholders and Ethical Dilemmas

This assignment provides an analysis of the role and importance of stakeholders in an organization, emphasizing the management's accountability to them. Stakeholders, as investors, bear the company's financial and business risks, necessitating the management's efficient utilization of resources for better returns. The report underscores the importance of adhering to proper accounting standards and avoiding incorrect financial statements that could harm the company's goodwill. It distinguishes between internal and external stakeholders, highlighting the need for a common understanding of the company's operations. The ethical issues at Blenheim Instruments Ltd, involving misrepresentation of financial statements and failure to meet loan conditions, are discussed. The report stresses the ethical responsibility to provide accurate information to stakeholders and the importance of whistle-blowing when encountering financial irregularities, advocating for the highest ethical standards and corporate governance principles.

Running head: FINANCIAL ACCOUNTING
Financial Accounting
Name of the Student:
Name of the University:
Author’ Note:

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Conclusion
The assignment has given a brief analysis of the role and importance of stakeholders
in an organisation. The management of the company is always liable and answerable to the
stakeholders of the company. The stakeholders are the investors of the company where the
long term interest for growth and profitability should align together in the context of view of
the management and the stakeholders (Hatherly 2016). The stakeholders of the company suffer
both the financial and business risk of the company. It is the operations, working and
utilization of the company by the management to ensure every asset and resources deployed
furnishes better return. It is always advisable that firms should be following proper
accounting standards and guidelines that governs the company (Lawrence and Weber 2014). It
should be noted that from the above report that stakeholder’s ad investors should not be
presented with incorrect financial statements which can destroy company’s goodwill and its
continuity in the long term. As discussed above that the stakeholders are generally divided
into two categories as internal who are already serving the company in the form of directors,
volunteers and others. The external directors are those that which are affected by the
influence and working policy of company’s operations. Creditors, governmental bodies and
suppliers are some of the important stakeholders of the company. It should be note that both
the parties should have a common view and perception about the company. The report also
highlighted about the ethical issues involved in the Blenheim Instruments Ltd where the
company had represented its financial statements incorrectly. It is the primary rule of proper
corporate governance and ethics that stakeholders should not be presented with false
information (Vosselman 2016). The company had taken financial loan which were on certain
terms and condition like the company should maintain a desired current ratio o 1.25 times but
the company could not do so. The requirements are generally made by banks and creditors to
ensure that the liquidity ratio of the company remains solvent. However it was also noticed

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that the company had inflated its component of current assets like accounts receivable or
debtors. The company had recognised that a major part of debtors which is represented by a
group of customers were not able to payback. The company should have made provisions for
the same keeping in view that the same amount would no longer be recovered. As highlighted
by Russell Bayer the accountant of the company that he was not sure about the recoverable
amount there the company could use probability approach for determining the recoverable
amount. However as noted that Jenny did her best she should inform the board of directors
and other stakeholders know about the financial issue company is undergoing through as part
of a professional ethical guideline of whistle-blower. The entitlement danger could be even
worse and the consequences for the company could be worst if the company is going through
such a heavy business risk and along with that financial risks and incorrect or false
representation of financial statement could destroy the company. Thus it is advisable to
follow the highest ethical guidelines and act and work with corporate governance principles
and guidelines set (Eisenberg 2017).

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Reference
Eisenberg, M.A., 2017. Legal models of management structure in the modern corporation:
Officers, directors, and accountants. In Corporate Governance (pp. 103-167). Gower.
Hatherly, D., 2016. The failure and the future of accounting: Strategy, stakeholders, and
business value. Routledge.
Lawrence, A.T. and Weber, J., 2014. Business and society: Stakeholders, ethics, public
policy. Tata McGraw-Hill Education.
Vosselman, E., 2016. Accounting, accountability, and ethics in public sector organizations:
Toward a duality between instrumental accountability and relational response-
ability. Administration & Society, 48(5), pp.602-627.