Improper accounting for sales

Outline of the case: You are one of three partners in a firm of accountants.

Since five years your company serves a successful and fast-growing company “B”, engaged to prepare year-end financial statements and tax returns. The business had started trading with a handful of employees but now the company “B” has a workforce of 200.

Due to your close relationship with the directors of the company (who are its owners) and several of its staff, you become aware that staff purchases of goods manufactured by the company are authorized by production managers, and then processed outside the accounting system. The income (=”black money”) from these sales are used to fund the firm’s Christmas party.


Please analyze this case study and make your own judgment: What is the right course of action you should do?

By doing so, please answer the following questions:

What is the story behind; e.g. what does it mean what the problem states? To whom?

Who is affected? Make a stakeholder analysis

Which theories are applicable? List them and describe why they are applicable

Decide for one of the theories and analyze the case under the point of view of the theory

Make your conclusion: What do you have to do, what is the right course of action?




Sample Solution