Cash Flow Analysis

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1. Who are the stakeholders in this situation? Describe and explain. The ten stockholders would be their stakeholders. The stakeholders are a group but without its support the organization would cease to exist. And they wanted to ensure that their stockholders received their dividends, to keep their interest in the company. 2. Was there anything unethical about the president’s actions? Was there anything unethical about the controller’s actions? Explain. The president had seen the problem and addressed it. But the controller’s decision was unethical, because he took a bank loan out to put their company over the $1 million mark. If he had explained to the president, what he had done, the president might have not with this decision. 3. Are the Board members or anyone else likely to discover the misclassification? Explain. I don’t think they will find out unless, they look at cash flow statements, and see the extra loan they took out. But either way I believe that it will hurt the company in the long run, especially if they are not able to pay it back. 4. Do you agree with the way Ted handled the matter? Would you have done the same thing? Explain. If I was handling the matter, I would have checked if there was anything else that I could have done first. I would have left that as the last option, and then explained to the president, what I was going to do to meet the goal. 5. Would this transaction ever need to be corrected? Why or why not? It would not need to be corrected, because it is stated as a loan, so it is expected to be paid back.
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