Every Fiddle Helps

The Tesco accounts scandal continues to roll on……the snowball grows……the plot thickens. Given the lies and deceit, you would be forgiven for thinking that this was the banking sector we were talking about not groceries. Bugger……forgot Tesco is also a bank. Oh well.

 

The story basically goes that Britain’s biggest retailer has a £250 million shortfall in its profits. The black hole was found in its commercial income……from income being booked from deals with suppliers very early (too early) and at the same time delaying the cost of the deals (too late). And that ladies and gentlemen is how you create a £250 million hole.

 

Tesco’s reduced profits will impact on its share price and the level of dividend to be distributed to investors……this effects the value of ISA’s, Pensions,……and so on. In effect, Tesco’s share price has been a lie.

 

To be fair to Tesco, they have brought in an external accountant to verify the accounts and sacked 8 company executives. Swift and merciless. But as we have seen with the banking sector, if employee pay is linked to profit……risks will be taken and lies will result.

 

All very sad. All very avoidable.