Financial statement fraud is one of the big problems facing accounting today. Many companies and organizations have given fraudulent financial reports in the past. Why? Well greed is one of the most common reasons for this. People give out false or fraudulent financial accounting reports in order to simply receive more money.

Recently in the United Kingdom, a former headteacher, Sir Alan Davies, who was head

of Copland School in north-west London, was sentenced with a 12 month sentence , suspended for two years, after admitting false accounting. According to the article, John Black QC, the prosecutor of the case, said “the six charges of false accounting that Davies admitted related to payments dating back to 2007 totalling £315,000, including several bonuses for Davies himself.”

We can see in this case that greed drove this headteacher to commit false accounting. This accounting fraud is part of a wider issue with business ethics. Our modern society can be so materialistic and greedy that ethics as a result are often ignored. People, especially leaders like him, need to be more honest and care more for things like business ethics. At the very least, our motivation to do this should be to set a good example for future generations. This is best shown in what Judge Deborah Taylor, the judge of this case, told the headteacher:

“You were in a position of trust at that school. Your dishonest behaviour represents a fall from grace. You have failed in your duty as head of the school – in failing to ensure proper, transparent management and, more importantly, you lied about it and resorted to dishonest fabrication.”

“What sort of message did that send to the children?”

Source:

Former headteacher sentenced for false accounting. (2013, Oct 03). The Guardian. Retrieved from http://www.theguardian.com/uk-news/2013/oct/03/headteacher-sentenced-false-accounting