Critical Analysis Of BP And It’s Ethical Decision Making

Introduction: Failure of BP, the global oil company has failed considerably that caused the deep-water oil split in the US. This was recorded as the biggest failure of oil splits in recent times. There are many reasons behind the failure of BP. The primary reason behind the failure of the company is that the company lacked accounting supervision and authority. The company has failed to include the major accounting theories as per General Purpose Financial Reports. This report is based on the Critical Analysis of BP and It’s Ethical Decision Making and also the accounting theories that the company could have undertaken is explained below.

Critical Analysis Of BP & It's Ethical Decision Making Power

Overview of the annual report of BP

The annual report states that the company BP does not have adequate cash flows. The operating profit of the company is also on the lower side. The valuation of goodwill has come down in the last financial year of 2013-2014. The company is also exposed liquidity and monetary risk. The equity share capital and earnings per share are low. The shareholders of the company are not getting their interim dividends. This can be improved if BP follows GPFR principles.

Critical Analysis Of BP And It’s Ethical Decision Making

BP has failed to include eight accounting principles of GPFR in their financial system. The first principle is about the delegation of roles among the management and subordinates. This principle was missing in the management of the company.

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