Hotel Accounting Case Study

1355 Words6 Pages
The action of understating expenses and overstating revenues in preparing financial statement are defined as financial statement fraud. This fraud is purposely to misleading the users as well as internal users or external users and give them a wrong impression of a company’s financial strength. So, this kind of action should not be done by a qualified accountants. Firstly, I should suggest my employer that do not simply assign the unachievable goal such as increase the profit of the hotel in a short time. The higher level of management should set accounting policies which do not apply in our hotel for the past ten years. With these policies, our hotel will not suffer losses due to competitor’s strategy. Besides, as an accountant, it is our…show more content…
Firstly, I should review the overall expenses of the hotel. After that, I can find out and drop the services which contributed poorly to the bottom line of the hotel. Besides, I can reduce the hotel’s bad debt by implement an effective debt collection system. By using this system, it can improve the cash flow and profits of the hotel. Moreover, I would determine some ways to reduce the labour costs in the same time utilize the labour effectively. For example, a housekeeping staff can clean up 15 rooms per day. In order to reduce the cost, we can ask them to clean up additional rooms per day. Furthermore, I can look for a cheaper option to save interest on the hotel’s loan by restructuring finance. As a result, it help to refinancing the hotel’s debt and also help to boost the profit. Besides that, it is important to review the supplier bills. For example, we should check whether there is any overcharged for goods or services such as beds, air conditioners, heaters and so on. This is because if there is any overcharged, it may create more expenses to our…show more content…
Firstly, it will cause losses and waste to the hotel as management will not be able to make effective decisions if the information given in financial statement is flawed. For instance, management may make deals that place a heavier financial strain on hotel’s assets than what is wise. Moreover, the financial report will not only used by management of the hotel itself, they also go to shareholders, government agencies and the general public. Errors in financial statements can cause people to lose faith in the company and its employees. Loss of reputation can cause a drop in stock value which will lead to a decrease of potential investor. Not only that, there will be a decrease in business prospects, as potential affiliates may not want to associate with a company that has a reputation for

More about Hotel Accounting Case Study

Open Document