Identification of Professional Accounting Issues -Free Samples

Question: How to the Identification of professional accounting issues? Answer: Introduction The company has faced tough competition from these competitors that resulted in the wiping off 10bn of the companys market value in 2014 post the announcement in 2014 about its first annual drop in profit in twenty years. As per the reports, Tesco did the booking of contributions from the suppliers that were uncertain regarding achieving sales targets that the company could not reach. It is understood that certain staffs, having the realization that these sales targets will not be achieved, started dealing with suppliers for making these payments by offering benefits in the coming financial period. These beneficial aspects were kept confidential and in the worst-case situation had the involvement of Tesco actually paying back the suppliers money in the next period. The Tesco Scandal also did the highlighting of the dangers as well as pressures of being a publicly traded organization having a focus that is fixed on the short-period. The board, the CEOs colleagues, the companys custome rs and the CEO himself is expecting the company to function with integrity as well as transparency and also, the company will be undertaking appropriate action with the clarity in the results regarding the investigation. It has also been stated the companys full-year trading profits might have been as low as 2.4bn, some 400m less than anticipated post the challenging conditions regarding trading. In the current months, the supermarket did the experiencing of a declining market share since discount chains like Aldi as well as Lidl have gained popularity. To maintain the quality of audits throughout the companys supply chain is essential to ensure that the company will be identifying the issues as well as supporting the suppliers of the company in addressing them. A major component regarding this is the companys Auditor Recognition Programme under which there will occur the acceptance of a tight group of audit bodies, schemes as well as individual auditors for auditing the sites suppl ying Tesco. In certain major sourcing countries, Tesco is operating an approved auditor method, in which all the auditor will be having additional training as well as evaluation by Tesco. Identification of professional accounting issues in Tesco It has been found out that Tesco has been overstating its profits by 263m post the recognition of the irregularities relating to revenue that were spotted in its half-year results, with regulators that includes the Financial Conduct Authority that will be deciding upon a appropriate punishment. The original prediction of the supermarket regarding its half-year trading profit was around 1.1bn, however this figure has currently been depleted by 263m. Tesco has consequently did the launching of the review regarding the figures for finding out why there occurred so much inflation of its prediction regarding first half profit (Wood, 2017). Tesco asked Deloitte for undertaking a review that is considered being independent as well as exhaustive that had the involvement of the accelerated identification of commercial income as well as delayed accrual of expenses. The usual auditors of the grocery chain are PWC. Deloitte did the completion of its investigation and found that there was overstating of profits by 118m in the first half of 2015, by 70m in 2013-14 financial year as well as by 75m prior to that (Peter, 2015). Dave Lewis, the newly appointed group CEO, did the explaining in a statement that the company did the uncovering of a serious matter and responses have been provided accordingly. The board, the CEOs colleagues, the companys customers and the CEO himself is expecting the company to function with integrity as well as transparency and also, the company will be undertaking appropriate action with the clarity in the results regarding the investigation (Christopher, 2016). It has also been stated the companys full-year trading profits might have been as low as 2.4bn, some 400m less than anticipated post the challenging conditions regarding trading. In the current months, the supermarket did the experiencing of a declining market share since discount chains like Aldi as well as Lidl have gained popularity (Fernie, 2014). The company has faced tough competition from these competitors that resulted in the wiping off 10bn of the companys market value in 2014 post the announcement in 2014 about its first annual drop in profit in twenty years. As per the reports, Tesco did the booking of contributions from the suppliers that were uncertain regarding achieving sales targets that the company could not reach. It is understood that certain staffs, having the realization that these sales targets will not be achieved, started dealing with suppliers for making these payments by offering benefits in the coming financial period. These beneficial aspects were kept confidential and in the worst-case situation had the involvement of Tesco actually paying back the suppliers money in the next period (Haddock-Millar, 2015). The Tesco Scandal also did the highlighting of the dangers as well as pressures of being a publicly traded organization having a focus that is fixed on the short-period. There occurs a demand from th e investors to increase performance, irrespective of the damage this might be doing to long-term business, innovative aspects as well as relationship with the customers. When growths are considered significant but less than estimate, they might be reacting in a manner that will be having major consequences. Therefore, many senior executives are currently focusing so much on its avoidance that they are having their focus on investors as well as analysts and not on customers or the longer period requirements of business as well as direction. This will be leading to the crisis that Tesco has encountered (Jones, 2015). The damage to the reputation of Tesco has already been enormous and there is the expectation of further depressions regarding sales. It appears that, Tesco undertook sufficient liberties with its Commercial Income that the companys auditor, Price Waterhouse Coopers did the mentioning of it in the last audit report. The Audit Committee of Tesco did not take into consideration the area to be a material factor in respect of disclosure. Delay regarding booking of costs can be understood very simply. It discusses regarding the delay in payments for deferring costs. As a matter of fact, there must occur the recognition of expenses upon receiving products or services. There might be a possibility that Tesco did the delaying of booking of costs by stopping the entry of invoices into its accounting processes (Jones, 2013). Supermarket giant Tesco has made an agreement of paying a fine of 129m in respect of overstating profits in 2014 and did the acceptance of responsibility regarding market abuse. The retailer has reached a delayed agreement regarding prosecution with the Serious Fraud Office that followed an investigation for more than two years (Gurd, 2017). To maintain the quality of audits throughout the companys supply chain is essential to ensure that the company will be identifying the issues as well as supporting the suppliers of the company in addressing them. A major component regarding this is the companys Auditor Recognition Programme under which there will occur the acceptance of a tight group of audit bodies, schemes as well as individual auditors for auditing the sites supplying Tesco. In certain major sourcing countries, Tesco is operating an approved auditor method, in which all the auditor will be having additional training as well as evaluation by Tesco (Lowe, 2014). To gather information with the help of workers regarding the concerns about the place of work is a significant addition regarding the gathering of intelligence with the help of other routes that includes audits, participatory interviews as well as connections with local stakeholders. To recognise the significance of effective workplace communication as well as the advantages to resolve the concerns of workers prior to their escalation, the company has collaborated with different administrative bodies regarding Business as well as Human Rights for piloting principles that will be underpinning a strong as well as efficient complaint method (Hashlam, 2016). Identification of management issues in Tesco The recession is upsetting the status-quo within the grocery industry of UK, making the German discounters Aldi as well as Lidl a socially acceptable place for shopping. However, Tesco has been very slow in its response regarding this new crisis with the announcement of 200m price cuts initiative that has been considered to be very late (Sughra, 2015). The main strategic problem associated with Tesco is that at present it is not clear who the company will be targeting as the supermarket is caught amongst the more upmarket offer regarding Sainsburys as well as Waitrose and the discounters Aldi and Lidl. These discount competitors are putting tremendous pressure on the major supermarkets in the UK in the previous years. The situations throughout the retail grocery market in the UK have been quite challenging. Customers are yet to have the feeling regarding the beneficial aspects of the economic recovery of the country (Imrie, 2014). The sales of Tesco have been plummeting for months and in June, the supermarket suffered its most awful trading in history that reported a 3.7% fall in UK like-for-like sales over the prior 3 months. In the current years, Tesco has faced confusion regarding its brand management as well as identification. There has been confusion regarding the proposition for Tesco, especially regarding pricing (King, 2016 ). Tesco has been concentrating on increased growth, fast expansion as well as cheap bargains in comparison to softer perceptions regarding customer care or possessing better associations with its suppliers. When this approach is compared with competitor Sainsburys, it can be stated that the latter made an addition of ten million new customers as well as 10bn additional sales in the last ten years under the leadership of Justin King, after placing the brand values at the core of his strategic aspect. Tesco has been besting with a number of changes in the management that included the exit of veteran finance director Laurie Mcllwee. Mr. Laurie was with the organization for fifteen years (Abernethy, 2017). Even prior to his exit, shareholders gave the description of Mcllwees behaviour to be aggressive as well as hasty. Identification of public relation issues in Tesco In January 2015, the newly installed chief executive of Tesco made an announcement regarding the major re-launching of the supermarket that included a decision of closing many of the companys less-performing out-of-town stores in respect of more profitable local outlets, a decision that was having a quick, positive influence on the share price of Tesco. All of the consultancy relationships of Tesco had been put under review and then an announcement was made that there has been hiring of Blue Rubicon by Tesco for advising it to actualize a reputational turnaround (Sparks, 2014). After a week, the supermarket had dropped ad agency Wieden+Kennedy for Bartle Bogle Hegarty (Mller, 2015). The new chief executive, Lewis had joined Tesco from Unilever that is having associations with Blue Rubicon as well as BBH, and both agencies left Sainsburys as well as Waitrose for working with Lewis at Tesco (Chesney, 2017). In September, it occurred that the profits of Tesco had been exaggerated to almost 250m. The subsequent scandal resulted in the suspension of senior executives and in the following weeks after the shares of scandal in Tesco reached a all-time low of 164 pence in mid-December. In this context, it can be stated that the primary job of Tesco should be associated with demonstrating its knowledge regarding what went wrong and has been putting in place means for avoiding any repetition in the future. The main factors are to rebuild trust with shareholders as well as stakeholders and this is considered being a gradual method and there is no easy solution (Tse, 2016). The next step is regaining the trust of investors regarding Tesco for setting out a strategic roadmap for recovering as well as proving to the markets that management is having a strong grip on the organization and is having the ability for addressing its problematic situations. The team that is handling the financial PR of Tes co is required refining its messaging from the perspective of investment as well as explaining what will be making it such a convincing proposal and after that delivering that message via proper channels. Tesco is considered to be the largest supermarket in the UK and the best prices are expected by the customers, but the company has been unsuccessful in delivering on that and has lost shoppers to cheaper retailers. In this regard, Tesco is being able to convey its message correctly by countering the discounting strategy of Aldi as well as Lidl with a campaign to promote cheaper branded products. Tesco is required winning back customers based on a price promise (Kukreja, 2016). Moreover, the company is also faced with the rise in its pension deficit. The organization is employing more than 300,000 individuals in the UK and is having one of the last remaining final-salary schemes regarding pension. Tesco did the utilization of the combination regarding multinational entry mode strategic aspects within a country. The companys ethical trading programme is considered to be an essential component regarding the companys promise for buying as well as selling their products in a responsible manner (Gerstein, 2016). The customers of the company is interested in knowing that all the materials that are purchased by them is made under upright conditions and all the individuals that are having an involvement are treated in a fair manner. There is full integration of ethical trade within the operational aspects of Tesco that forms a major part of the companys broader strategic aspect in respect of corporate responsibility. The delivery of its goals as well as activities occurs by an extensive range of commercial staff. The values of the company are focusing on two major areas that are the ways by which the company is ensuring they are meeting the requirements as well as anticipations of the customers and the ways by which the company is functioning with others. The aspect to set, communicate as well as enforce strong standards is considered to be a major aspect of the companys ethical trading programme (Andersson, 2016). There occurs the evaluation of all potential new suppliers for ensuring that they acknowledge the standards that is required by the company and are having the capability of meeting them. In this context, there occurs the assessment of risk regarding all new suppliers prior to the commencement of the supply, with proper action being taken for resolving any serious matters before the commencement of supply. Conclusion To conclude, it can be stated that Tesco had been put under review and then an announcement was made that there has been hiring of Blue Rubicon by Tesco for advising it to actualize a reputational turnaround. After a week, the supermarket had dropped ad agency Wieden+Kennedy for Bartle Bogle Hegarty. The new chief executive, Lewis had joined Tesco from Unilever that is having associations with Blue Rubicon as well as BBH, and both agencies left Sainsburys as well as Waitrose for working with Lewis at Tesco. The main factors are to rebuild trust with shareholders as well as stakeholders and this is considered being a gradual method and there is no easy solution. The next step is regaining the trust of investors regarding Tesco for setting out a strategic roadmap for recovering as well as proving to the markets that management is having a strong grip on the organization and is having the ability for addressing its problematic situations. The team that is handling the financial PR of Te sco is required refining its messaging from the perspective of investment as well as explaining what will be making it such a convincing proposal and after that delivering that message via proper channels. Tesco is considered to be the largest supermarket in the UK and the best prices are expected by the customers, but the company has been unsuccessful in delivering on that and has lost shoppers to cheaper retailers. The customers of the company is interested in knowing that all the materials that are purchased by them is made under upright conditions and all the individuals that are having an involvement are treated in a fair manner. There is full integration of ethical trade within the operational aspects of Tesco that forms a major part of the companys broader strategic aspect in respect of corporate responsibility. The delivery of its goals as well as activities occurs by an extensive range of commercial staff. 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