2. Carlon et al, 2019, Financial Accounting: Reporting, analysis and decision making, 6th Edition, Chapter 1: BBS 1.8 (p. 92)

As the chief financial officer of Mobile Phones Pty Ltd, you discover a significant misstatement that overstated assets in this year's financial statements. The misleading financial statements are contained in the company's annual report, which is about to be issued to banks and other creditors. After much thought about the consequences of telling the managing director, Jack Frost, about this misstatement, you gather your courage to tell him. Jack says, 'What they don't know won't hurt them. But just so we set the record straight, we'll adjust next year's financial statements for this year's statement. We can fix it next year when we make more profit. Just don't make that kind of mistake again.'

Required

(a) Who are the stakeholders in this situation? (b) What are the ethical issues? (c) What would you do as the chief financial officer?