St. Genevieve Petroleum Company is an independent oil producer in Baton Parish,

Question

St. Genevieve Petroleum Company is an independent oil producer

in Baton Parish, Louisiana. In Februrary, company

geologists discovered a pool of oil that tripled the company's

proven reserves. Prior to disclosing the new oil to

the public, St. Genevieve quietly bought most of its stock as

treasury stock. After the discovery was announced, the

company's stock price increased from $6 to $27.

Requirements:

1. What is the ethical issue in this situation? What accounting

principle is involved?

2. Who are the stakeholders?

3. Analyze the facts from the following standpoints: a) Economic

b) Legal and c) Ethical

4. What decision would you have made?

Explanation / Answer

1) Undoubtedly, there are serious ethical issues around the dependence on oil from foreign sources that shelter corrupt governments and enable ongoing human rights abuses. But there are also serious ethical issues here at home.

Take for instance the federal government's current lack of regulations, which allow oil companies to use the atmosphere as a dumping ground for greenhouse gas pollution, leaving others to suffer the consequences. Or consider the unaccounted environmental and economic liabilities of billions of dollars facing our children from oilsands companies underreporting their reclamation costs, the absence of any federal savings plan from oilsands wealth, the predicted loss of caribou from the region, the inadequate consultation with First Nations, and the sacrifice of a competitive manufacturing sector from an overheated dollar. There is no shortage of unethical impacts from oilsands development that the some critics conveniently overlook.

2) A person, group or organization that has interest or concern in an organization.

Stakeholders can affect or be affected by the organization's actions, objectives and policies. Some examples of key stakeholders are creditors, directors, employees, government (and its agencies), owners (shareholders), suppliers, unions, and the community from which the business draws its resources.

Not all stakeholders are equal. A company's customers are entitled to fair trading practices but they are not entitled to the same consideration as the company's employees.

An example of a negative impact on stakeholders is when a company needs to cut costs and plans a round of layoffs. This negatively affects the community of workers in the area and therefore the local economy. Someone owning shares in an business such as Microsoft is positively affected, for example, when the company releases a new device and sees their profit and therefore stock price rise.

Oil is a messy industry, in pretty much every conceivable way. There’s no such thing as clean oil, or an environmentally friendly oil company, but there are degrees of responsibility. Likewise with business ethics. The oil companies have been involved in some very murky business in the past, and some really do have blood on their hands. So, which is the best one to buy your petrol from? Here are the top five oil companies, and a few notes on their record.

3) if taken into account according to economic value,then it is a good decession taken since it is inceasing the amount

legaly and ethicaly we can say that

No matter where it's happening, extracting oil from the ground and burning it for energy comes at too high a cost for us not to be investing substantially in the clean energy alternatives that are readily available. Canada stands to benefit more from ensuring that ongoing oilsands extraction is happening at a pace that's responsible, and is managed in a way that minimizes harm, while investing in energy solutions that help all.

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