Discuss whether Tomas is behaving in a professional manner.?

Question

At the end of the current month, Tomas Lott prepared a trial balance for AAA Rescue Service. The credit side of the trial balance exceeds the debit side by a significant amount. Tomas has decided to add the difference to the balance of the miscellaneous expense account in order to complete the preparation of the current month's financial statements by a 5 o'clock deadline. Tomas will look for the difference next week when he has more time.

Discuss whether Tomas is behaving in a professional manner.

Answer 1

Professional?  Not totally, no. He has chosen to take a shortcut on a material difference which is contrary to GAAP.  But, he has taken an action which is in synch with the conservative principal of accounting.  I think it would depend on how important the 5:00 deadline really is.  If the f/s are needed absolutely by that time, then they have a worst case scenario of where the company is at financially.  If he can, however, he should refuse to present the f/s referencing the unknown error and either spend the o/t needed or postpone it until the next day.