A trading company, with a focus on buying and selling bonds and shares, contacted us to review their annual financial statement prepared by an accounting firm in Cyprus.
The request included an investigation of any possible misstatements in the financial reports due to income miscalculation. The company owner claimed the bookkeeping to be improper, resulting in distorted financial results, which in turn showed a lower amount of income than the company actually earned. The above conclusion was based on the owner's personal Excel calculations recorded throughout the year.
The income in his own calculations were equal to 20 million, while the final statements reflected sales at 10 million. The number of securities traded through the brokerage account and posted in the accounting books fully reconciled with the number of securities shown in the owner's Excel file. At the same time, the values of transactions had substantial differences. Taking the matter in our own hands, our priority was to thoroughly investigate the accounting records further and review the Excel spreadsheet.