John works at Star Company. Star Company is an accounting firm that provides to ABC company bookkeeping, payroll, and income tax return services. ABC Company's business expenses charged on the credit card were not recorded in the financial statement for the period ending in 2022. The income tax return is filed for the period ending 2022, and it excludes credit card charges.

1. What should be done in this case? Is that possible to record prior year expenses in the current year? If yes, how (debit and credit of accounts)?

2. A tax preparer, John, who filed ABC's company's income tax return for the last 4 years, does not have enough understanding of the client's business operation. A new hire, Alice, who has several years of experience in accounting, reviewed and familiarized with ABC company's operation, and informed that credit card charges from 2022 had not been recorded before John filed the client's income tax return.

John said that he had already been in trouble, and ABC was not happy with John's work performance. Since John already sent the draft copy of the tax return to the client, he said to the new hire that we would record the credit card expenses that were not recorded in 2022 in the 2023 books.

John is a manager, but not CPA. Did John handle this situation correctly? How John actually had to handle this situation?

3. Alice has integrity in her work and complies with the principles of the Code of Professional Conduct, and wants to become a CPA. For Alice, it is been very difficult to work with John. Alice feels guilty for telling the truth. Alice tells John that he has to be responsible for resolving the issues which make him angry. Alice also informed the corporate regarding all the issues.

What would be recommended and suggested (legally and ethically) for Alice to move forward in this difficult situation?