In around 700 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?