With incomplete financial records, what steps should an accountant take to track down the shady dealings of a nightclub co-owner in order to help the more honest partner to re-launch the debt-ridden business?
With incomplete financial records, what steps should an accountant take to track down the shady dealings of a nightclub co-owner in order to help the more honest partner to re-launch the debt-ridden business?
This case discusses the hypothetical situation where two "friends", Moe and Joe, opened a nightclub. Moe managed the kitchen and employees and tended bar, while Joe used his political clout to attract customers and did the bookkeeping. The tavern seemed to be a runaway success, but the corporation did not keep much in the way in the way of financial records. A year and a half later, Joe has disappeared, and Moe learns many of their debts are months past due. In this case, students take the role of Moe's newly hired CPA to determine how much income the tavern earned in its 18 months of operation, and how much money Joe stole.