Biggest Accounting Blunders of the Last Decade

Undertaking to learn accounting can be an interesting and lucrative endeavour. It does, however, require you to pay attention when learning and pay extra attention when executing your work as having a premium financial education means nothing if you aren’t paying attention when it comes to the crunch. Accounting blunders can have dramatic consequences and there have been a number of catastrophic incidents over the past decade that echo this sentiment.

Let’s take a look at some of the biggest accounting blunders in recent history:

The Bank of America

In 2014 the Bank of America admitted that it had made a massive error when calculating important elements of its finances. Once the error was uncovered it became apparent that the company’s capital was 4 billion USD (United States Dollar) less than originally believed. What is even more shocking? The accountants employed at the Bank of America allowed the issue to go undetected for a number of years.

RMS Tenon

RMS Tenon was a British-based professional services firm that went into insolvency in August of 2013. This company was also the recipient of a monumental accounting blunder when in 2012 the firm uncovered a number of errors, as a result the pre-tax profit reported for 2011 was far less than initially believed. Specifically, 12.1 million GBP less, an amount large enough to cause the collapse of the company.

The above-mentioned accounting errors, though devastating, were the result of human error. The story of Tesco is slightly different and spotlights a whistle-blowing accountant who was paying attention to his work.

Tesco

Tesco is a UK based multinational general and grocery retailer that has been in business since it was founded by Jack Cohen all the way back in 1919. The company was struck with tremendous embarrassment in 2015 when a 250 million GBP (the currency of Britain) profit shortfall was uncovered. The discovery prompted an independent inquiry into the accounting blunder which ultimately uncovered that the retail giant was riddled with corruption and making use of inappropriate practices. The issue was exposed by a whistle-blower accountant who reported the problem to Tesco’s management. While this incident caused the company embarrassment it was not simply the result of an accounting blunder.

At the Academy of wealth, you can learn accounting by enrolling in one of our online financial classes and avoid any embarrassing incidents once armed with a premium financial education. Completing one of the financial literacy programs on offer at the Academy of Wealth will give you a leg up on your competition.