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Most popular grocery and retail megastore

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In 688 words...
Tesco's Accounting Scandal
Tesco, Britain's most popular grocery and retail megastore, is known as the second largest multinational retailer in the world. However, due to strong competition in the European market, the company's profits have been progressively declining in the past few years. As if that is not enough to affect Tesco's standing, their recent accounting scandal contributed to further damaging their reputation. It was revealed that Tesco has allegedly been overstating their incomes and understating costs. They had initially overstated their annual profit by £250 million, which is an overstatement of nearly 25%.

According to above scandal, please discuss and explain what accounting principles they violated and what your recommendations for a fix are?

I'm so sorry i didn't realize if it was deleted.

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https://brainmass.com/business/forensic-accounting/most-popular-grocery-retail-megastore-612354

Solution Preview

The response addresses the query posted in 688 words with APA References.

//The accounting defaults observed in the financial reports of Tesco have been stated in the below-mentioned segment and accordingly the defaulted accounting standards have been elaborated and accordingly recommendations to the company have been provided.//

In the recent past, Tesco is considered to have undertaken enough liberty in defaulting the accounting principle of full disclosure as it had undertaken excessive liberty in disclosing its commercial income. Another salient principle of GAAP of revenue recognition was neglected by Tesco, as it overstated the profits by nearly £ 250 millions, even after the irregularities of revenue recognition were spotted in its half-yearly financial results that could be segregated in £ 70 million in 2013-2014 and £ 75 million in 2012-13 (Bergin, 2014). The concerned issues were about the payments received from the suppliers that pay for run-in store promotions, on the behalf of them were booked in advance.

For a business, the complete or full disclosure requires the company to ensure the disclosure all the necessary information through that might influence the decision-making of the investors and other stakeholders (Bergin, 2014). Thus, the complete disclosure could be made in the supplementary notes and schedules included in the financial statements of ...

Solution Summary

The expert examines the most population grocery and retail megastore in Britain. The response addresses the query posted in 688 words with APA References.

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