Imagine that you are one of three partners in an accountingfirm. Five years ago,...

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Accounting

Imagine that you are one of three partners in an accountingfirm. Five years ago, the firm was appointed as externalaccountants to a successful startup company, engaged to prepareyear end accounts and tax returns. The startup had begun tradingwith a handful of employees but now has a workforce of 200, whilestill remaining below the size of company requiring a statutoryaudit. Due to your close relationship with the director/owner ofthe company and several of its staff, you find out that staffpurchases of goods manufactured by the company are authorized byproduction managers, and then processed outside the accountingsystem. The proceeds from these sales are used to fund the firmsholiday party. In the discussion forum, answer the followingquestions: Would this practice of omitting income from staff salesresult in misleading financial statements? Is the practicedishonest? What should be your involvement? How should you act inorder to protect your reputation, you firms reputation, and thereputation of your profession?

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ANs Ans Yes of course this is wrong practice and will definitely result misleading of financial statements As per accounting concept every debit will have credit that simply means if production is happening it will have See Answer

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In: AccountingImagine that you are one of three partners in an accountingfirm. Five years ago, the...Imagine that you are one of three partners in an accountingfirm. Five years ago, the firm was appointed as externalaccountants to a successful startup company, engaged to prepareyear end accounts and tax returns. The startup had begun tradingwith a handful of employees but now has a workforce of 200, whilestill remaining below the size of company requiring a statutoryaudit. Due to your close relationship with the director/owner ofthe company and several of its staff, you find out that staffpurchases of goods manufactured by the company are authorized byproduction managers, and then processed outside the accountingsystem. The proceeds from these sales are used to fund the firmsholiday party. In the discussion forum, answer the followingquestions: Would this practice of omitting income from staff salesresult in misleading financial statements? Is the practicedishonest? What should be your involvement? How should you act inorder to protect your reputation, you firms reputation, and thereputation of your profession?