BUS320 Business Governance and Society
Anchorage bought DickSmith from Woolworths for millions in, then floated it for millions months later on the stock exchange. In, DickSmith closed down stores in Australia and New Zealand, after failing to secure a sale offer. As result, workers in Australia and New Zealand lost their jobs, customers were left out of pocket on undelivered goods or lost their deposit, shareholders lost their shares and interests. It seems that Deloitte, an auditing company, approved Dick Smith’s financial report as on free from manipulations, which was erroneous and turned out to the frauduleus. It was alleged that Deloitte was involved into the manipulation in the inventory records of the company. The company then affirmed that there was a need of reducing the amount of inventory by million in.
However, there was no such evidence. However, it is the inefficiency of the auditors in the inventory and certain occurrence of collusion between the managers and the auditors, that affected the interests of the stakeholders.
Consequences and Ethical Question
As a consequence, two years later: Customers gift cards were not honoured and 3300 jobs around Australia and New Zealand were lost ; It was also a terrible wake up news for the investors. It’s evident that private equity firms have every right to do what they do , as to find distressed assets, transform them, and maximise returns for their investors. It would also appear that they complied with all the requirements for a share market float. These sorts of events undermine public trust in the mechanics of the business community and some of the accounting profession.
So the question is: Was Dick Smith ethical in the way they perceived their financial value as to investors?
1. What are the stakeholders stakes? Power? Legitimacy? Urgency?
2. What opportunities and challenges do stakeholders present?
3. What Responsibilities does the firm have toward its stakeholders? Economic? Legal? Ethical? Philanthropic?
4. What Strategies or Actions should the firm take to best address stakeholders?
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