Posted on 14/09/2016
Accounting Errors Sees BT Hit With £145 Million Charge
The errors were discovered after an internal inquiry found that there had been ‘historical accounting errors’. BT said it has now ‘reassessed certain areas of management judgement’. The good news was that the errors had not had an adverse impact on the reported earnings of the company over the past two years, but BT admitted that the £145 million charge was their estimate of the financial implications of their investigation. They said, “The write-down relates to balances that have built up over a number of years.”
If there’s one thing we know here at One Abacus, it is that correct accounting is vital for businesses. That is why we offer hassle-free accounting packages for small-to-medium-sized businesses. We believe that accounting and bookkeeping are not something you should be stressing about, particularly if you have no knowledge of these practices. Why give up your time doing something you know very little about when you could be devoting that time to what you excel at – like growing your business?
The Consequences of Accounting Errors
Accounting errors can be very costly, as BT has discovered. Thanks to ‘inappropriate management behaviour’ at BT Italia, the company is set to take a £145 million hit. However, the firm was quick to assure shareholders that the full year figures would not be affected by the non-cash charge. They have now brought in external advisors to conduct a full investigation into the incident.
Internal Inquiry
The errors were discovered after an internal inquiry found that there had been ‘historical accounting errors’. BT said it has now ‘reassessed certain areas of management judgement’. The good news was that the errors had not had an adverse impact on the reported earnings of the company over the past two years, but BT admitted that the £145 million charge was their estimate of the financial implications of their investigation. They said, “The write-down relates to balances that have built up over a number of years.”
Long-Term Outlook
BT have stated that the long-term outlook of the company has not changed, even though the weakened pound has had a negative effect on its financial performance. A statement read, “While the future nature of Britain’s trading relationship with the EU and globally is currently uncertain, the board does not expect the result of the referendum to have a significant impact on our outlook … We continue to monitor the longer-termimpact of the UK’s decision to exit the EU.”
Taking Care with Accounting
Here at One Abacus, we offer efficient and affordable accounting and bookkeeping packages for clients who are too busy to take care of this important role themselves. If you are a sole trader, limited company or need to complete self-assessment forms, call us today for a competitive quote.
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