Tack was left some money in his mother's will and decided that he should give up his job and go into business for himself. Whilst the lawyers were still sorting out his mother's estate he started looking round for a suitable business. After a short time he identified a small bacon-curing business that he felt was worth investing in. He was still uncertain how much his mother had left him but thought that it was probably between £40 000 and £50 000. The bacon-curing business was for sale for £100 000 and so assuming that he could finance the remainder he engaged an accountant to check over the books of the existing business and report back to him. As proof of his good faith he deposited with the business agents £1000 which he had in savings.

The report from the accountant confirmed his initial impression that the business was worth investing in and so he paid the accountant's modest fee of £500 in full. At this stage he discussed his plans more fully with his bank manager who was impressed with the professional approach taken by Tack.

The bank manager pointed out that Tack had no business experience and therefore was a high risk from the bank's point of view. However, in view of their long-standing relationship the bank was prepared to take a chance and said that it would lend Tack 40%
of the purchase price.
On the basis of this Tack signed a conditional agreement to buy the bacon-curing business. A short time after this he received from the lawyers a letter stating that his inheritance from his mother amounted to only £30 000. He could not raise the additional finance to purchase the bacon-curing business and so withdrew from the agreement, recovered his £1000 deposit and purchased a yacht with the intention of doing charter work to the Caribbean.
You are required to discuss the point at which, in your opinion, the accounting process should begin, giving reasons for your point of view. You should pay particular attention to the dual needs of Tack as an owner and as a manager.