1. Ethics in business: Toffee and More Ltd manufactures several varieties of candy. An action has been brought against the entity by a customer who broke a tooth while eating one of the entitys fudge bars. The managing director of Toffee and More Ltd, Sweet Tooth, has suggested that this should not be reported as a contingent liability because the entity might win the case, and any mention of this in the financial statements could encourage more lawsuits and increase the entitys liability.

Required: a. Who are the stakeholders in this situation? b. Who would be potentially harmed or disadvantaged by non-disclosure of the contingent liability? c. Are the managing directors actions ethical? Refer to at least two ethical theories in your answer.