You have been the finance director of a clothing retailer for ten years. The companys year end is 31 March, and you are finalising the year end accounts.

You have recently been advised by the warehouse manager of a significant level of slow-moving stock. The stock in question is now more than nine months old and would normally have been written down some months previously.

The shareholders are trying to sell the company, and the managing director (the majority shareholder) has told you that it is not necessary to write down the stock in the year end accounts. You are sure that the managing director wants the financial statements to carry an inflated stock valuation because he has found a prospective buyer. The managing director has indicated to you that, if the proposed deal is successful, all employees will keep their jobs and you will receive a pay increase.

Requirement:

In relation to the scenario above:

1)Outline the relevant facts (What? Who? Where? When? How? What is the key information we need to know to help identify the issue/problem?)

2)Identify the affected parties/stakeholders

3)Highlight who should be involved in resolving the issue

4)Outline possible courses of action

5)Conclude on the best course of action