Accounting Theories On Case Of Whistle-Blower In Barclays

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Question :

ACC5216 Accounting Theory


This assignment is a research based essay where you are required to relate a real world case study to accounting theory. Below you will find links to news article relating to the fine of ‘Barclays’ CEO after trying to expose whistleblower. Whilst this article provides the context for this assignment, you need to ensure that you also refer to other sources. You also need to incorporate both academic and non-academic articles but must have at least 10 academic journal article references from which you will refer to theoretical issues. (Please make sure that you know what an academic reference is).

Using the news article provided below as a base, and referring to other appropriate literature, discuss and critically evaluate the following:

 Determine the facts of the case. Who is a whistleblower? 

 Identify and discuss why the Barclays CEO was trying to expose whistleblower. 

 Describe an accounting theory that may help explaining the CEO’s conduct leading to the whistleblowing. Critically link that theory with CEO’s behaviour. 

 Using a second accounting theory, explain how your chosen theory may apply to whistleblowing. How this theory is related to whistleblower behaviour? 

 Using a third accounting theory, explain the regulator’s quest to make the CEO accountable. 

 Compare, contrast and critically evaluate the three theories you have chosen. 

 YOU MUST relate your answers to the link between theory and practice.

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Answer :

 Accounting Theory

The assignment provided with detail study of the Barclays and also discussed the accounting theories matching with the case. The accounting theories have provided the complete picture of the case and are completely different in their own way. 


The assignment is based on the real world case study of whistle-blower in Barclays bank. Barclays is a multinational bank indulge in providing financial and investment services. The case of Barclays will relate to accounting theory. There will be the use of both academic and non-academic articles to discuss accounting theories.

Facts of the case

The CEO of Barclays named Jes Staley fined amounted to $642430 pounds for hiding the whistle-blower. There was also cut off bonus of Jes Staley. The investigation was also conducted in the bank which found the conduct of Staley against the regulation. Staley breached the standard of care which was expected from any CEO of the Company (Kelton, 2018). The fine imposed on CEO of Barclays was the third largest and biggest by FCA on an individual. The fine can be said to be equivalent to the 15% of the compensation reported in the year 2016. 

Whistle-blower has always been found to be effective in exposing any fraud, misconduct and poor practice in the financial services sector (Fletcher, 2018). After seeing the whistle-blowing system of Company like Barclays, the FCA and prudential regulation authority enhanced the monitoring and scrutiny on the measures which has been implemented by a firm providing financial services. High protection was raised with the arrival of this scandal to whistle-blowers. 

In June 2016 board of Barclay's received an anonymous letter which was the main concern on the appointment or recruitment of the former colleague of Staley's at JP Morgan Chase. Employees were not in favor of the recruitment. There was an issue of personal nature in this appointment and Staley and the Main role was main concern at JP Morgan. The whistle-blower was the bank staff.

 Barclays was recruiting a person who was having the personal interest with the CEO of the Company. Staley, CEO of the Company attempted to recognize the whistleblower in order to stop the person from raising issues with the appointment. The actions of Staley were permitted by the board (Suryanto, 2017). After an investigation made on such act of CEO by FCA and PRA, the fine was imposed on CEO and CEO also admitted at an early stage of the investigation. CEO of Barclays allowed his personal interest to override its objectivity in the bank. Staley attack employee A and employee were against of the decision of Staley as he was appointing senior individuals from the rival firms of Barclays. Staley observed the first letter which was signed by John Q Public which was from shareholder but not an employee and thought that he could identify the sender. The second letter was also recognized by Staley which came from employees. 

Accounting theory

The normative accounting theory best suits the case of whistleblowing in Barclays. As per the normative theory of accounting the main concern is on future acts with respect to the daily phenomena (Wahl-Jorgensen and Hunt, 2012). It is independent of current practices and also helpful in solving critical problems may take place in the future. As per the case of Barclays, the CEO was planning to involve its own people in the Company may be to misuse the double power or to enjoy the advantage of having its own people in the office. With the recruitment of person having a personal interest with Staley, employees may feel discriminated, poor behavior and working of the bank against the policy. This might have a negative impact on the working environment of the bank as the board was also involved in providing full support to Staley to identify the whistle-blower (Jones, et. al., 2014). This was kind of misconduct by the CEO of Barclays which should have stopped by the board itself. The future events were clearly visible with the decision of recruitment of person from JP Morgan. 

The behavior of CEO of Barclays unethical and representing the illegal conduct of board as it authorized CEO to perform such investigation. The present act of CEO was reflecting the worst future of the Company if not handled or investigated on time. The act of CEO was not under the code of conduct and policies and was also against the regulations and laws. The unethical act of CEO was partial, favoritism and discrimination among the senior and junior employees. There was the wrong method of recruitment adopted as no formal process was followed for appointing the person having a personal concern with CEO of Barclays.

Second Accounting theory 

The second accounting theory which is feasible as per the case of Barclays is the Communicative theory (Miceli, et. al., 2013). The theory says that any special phenomena can tell the future way of behavior. The theory is based on achieving some common goal and forecast future events and can help in guessing the event if have knowledge. The whistle-blower is a mechanism addressed in the corporates for dealing effectively with frauds, wrong dealings and any misconduct taking place in the operations. This allows the employees to participate in addressing any doubtful act or transaction of any officer in the Company. They can inform on the misbehavior of any employee or any other officer even the CEO and manager of the Company. Hence it is raising the voice against the unethical act privately carried out within the organization. Employees are motivated by the whistle-blower mechanism as they feel as an imported part of the organization. 

The theory of communicative in accounting may apply to whistle-blow as any misbehavior are recognized at the right time and thus helps to achieve the goal of Company to ensure healthy and corruption-free environment and preventing from the creation of any bad image in the society due to dishonesty and fraud of any one individual in the Company. Whistle-blower behavior has to be free from any biases and personal interest to raise the voice correctly and at the right place (Parker, et. al., 2011). With the happening of any special event, the employee must behave as a well-wisher of the Company and communicate any misleading event immediately. The employees who are participating genuinely in the mechanism reflect their future behavior in the organization which is good for the firm in long run. 

Third Accounting theory

Third accounting theory is an evaluative theory which knows about the quantity and quality of an event or quantitative quality and qualitative quantity. The theory assists in measuring the qualitative theory of concerned event. In the case of Barclays, the regulation authorities investigated the case in detail and imposed hefty fines on the CEO of Barclays. This became a lesson for every other Company to enhance their security in the mechanism of a whistleblower mechanism (Suryanto, 2017). The regulatory authority has provided a complete picture of the intention of CEO in doing such an unethical act. This has safeguarded the interest of employees in the firm. With the application of both qualitative and quantitative measurement, the CEO was able to confess at the very early stage of the investigation by the Company. 

Comparison and evaluation of three theories

All the three theories are significant in terms of whistle-blower case in Barclays. The three theories have significant relation with the case.  The normative theory has out the light on the happening of the conduct of CEO and his behaviour (Wahl-Jorgensen and Hunt,  2012). The theory is mainly for solving critical problems in the future. The act of CEO was able to develop a critical problem for the firm. The CEO was independent of the current practice and was able to go beyond the standards set not only by the Company but also by the regulations body. A communicative theory which is another theory of accounting gives the exact forecast of events. The employees after reporting any illegal or unethical act gives the forecast of the Corporation position and any wrongful act in the Company. The third theory is evaluative which is a measurement of the qualitative event and thus measures the depth of the whistle-blower helping to know the intentions of the board of the corporation. The three theories are completely contracted in their own way and provide the comprehensive picture of the case of Whistle-blower in the Barclays. 


To sum up it can be said that the CEO of Barclays was apparently involved in the misconduct by appointing his own person. The case was thoroughly investigated by the FCA and PRA. The three theories of accounting have provided the use of the concepts described therein with the case of Barclays.