Contemporary Issues in Accounting: Tesco Accounting Scandal Analysis

Running head: CONTEMPORARY ISSUES IN ACCOUNTING
Contemporary Issues in Accounting
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1CONTEMPORARY ISSUES IN ACCOUNTING
Executive Summary
The main aim of this report is to analyse and evaluate all the aspects related to the accounting
scandal of Tesco. The discussion shows the effects of the Tesco accounting scandal on the
company along with the ethical issues. It also shows the major stakeholders affected by the
scandal. It can also be seen that relevance of accounting theories with the situation. After that
this report shows the lessons learnt from this case of Tesco.

2CONTEMPORARY ISSUES IN ACCOUNTING
Table of Contents
Introduction......................................................................................................................................3
Details of the Scandal, Its Consequences and Ethical Issues..........................................................4
Identification of the Stakeholders....................................................................................................6
Application of Theories...................................................................................................................8
Evidences.....................................................................................................................................9
Possible Solutions..........................................................................................................................10
Lessons..........................................................................................................................................11
Concussion and Recommendations...............................................................................................12
References......................................................................................................................................14

3CONTEMPORARY ISSUES IN ACCOUNTING
Introduction
Accounting or Accountancy refers to the process to measure, process and communicate
the financial information of the business entities. For this reason, effective conduct of the
accounting operations is considered as one of the major factors for organizational success (Scott
2015). At the time of conducting the audit operations, it is the responsibility of the business
entities to comply with all the required accounting as well as financial regulations and principles
so that the companies can avoid major accounting issues. Apart from the accounting standards
and principles, business entities are also required to comply with the ethical standards of the
audit profession (Kidwell et al. 2013). In this context, it needs to be mentioned that non-
compliance with these accounting and ethical standards and principles can lead to major
accounting scandals in the business organizations and these accounting scandals create major
negative effects on the organizations, people related with the organizations and other
stakeholders. In the recent years, there has been occurrence of major high profile accounting
scandals all over the world. The accounting scandal of Tesco in the year 2014 was a major
accounting scandal as it showed the ongoing loopholes in the accounting profession. These
accounting scandals have large negative impact on the accounting profession as they downgrade
this profession. The main aim of this report is to analyse and evaluate all the aspects related to
the accounting scandal of Tesco. This report also takes an attempt to measure the consequences
of this collapse along with the identification of the related parties affected by this scandal. After
that, this report aims in relating two major accounting theories with this scandal. Lastly, this
report focuses on deriving the major lessons learnt from this scandal of Tesco.