Is this fraudulent?

StuartBates Registered Posts: 2
Hi all

My name is Stuart and I am currently a student member about to take my last module for AAT level 3 (CSTR).

I am currently doing some work at a local accountants office to get some practical experience (VAT returns, year end accounts).

To cut to the chase, the working environment is a little hectic as the owners are going through a divorce and constantly arguing, the only other qualified accountant in the office left due to the conduct of the managing accountant. I am the only member of staff (although I'm not technically staff as I am classed as self-employed apparently) with any knowledge of preparing accounts so have no one to get support from.

I am currently working on the year end accounts of a local Farrier and I have picked up on a note written on the working papers for year ending 2013 - 2014.

On the workings for Trade Creditors there is a note to say,

"Remove t/creditors and include as expenses in 2015 accounts as client wants higher profits to get a mortgage."

I just thought this seemed odd and wondered if it constitutes false representation on the grounds that it will make the client appear more profitable and thus meet the requirements of a mortgage lender?

I would be very grateful to hear your views on this matter and possibly offer advice on what I should do.

Thanks in advance

Stuart Bates


  • Gem7321
    Gem7321 MAAT, AAT Licensed Accountant Posts: 1,438
    I'm assuming the farrier meets the conditions for using the cash basis to prepare accounts, is this the case?
  • burg
    burg Moderator, FMAAT, AAT Licensed Accountant Posts: 1,441
    @Gem7321 's thoughts would be mine. Is it simply a note to say consider using the cash basis and being a farrier has no debtors or there were not any debtors or you have not seen/found that note.

    A one-off would cause a little concern but just move on but more similar things may cause more concern.

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