Question

Is the issue of airbus discovering discrepancies in its disclosures about middlemen used to win commercial export deals, have to do with accounting? If so can someone please explain how?

Answer 1

Issue: Does the investigation into the affairs of airbus discovering discrepancies in its disclosures about middlemen used to win commercial export deals, have anything to do with accounting.

Background:  US Department of Justice had opened an inquiry into the investigation of Airbus for suspected bribery and corruption in 2017. The suspicion arose after Airbus's disclosure in 2016 about having neglected to inform the Organization for Economic Cooperation and Development about middlemen payments in order to secure many contracts, particularly in Asian countries. Such payments are allowed under the anti-corruption guidelines set by the authority only if the recipients as well as the compensation are fully disclosed.

Analysis: As seen in the above discussion, Airbus had made a lot of payments to third parties that were never reposted in/ accounted for in its books of accounts. On studying the case closely, it has been found out that in 2013 the company began discovering deviations in amounts recorded for numerous contracts over the past years. Thus, many of the alleged commissions were never accounted for in the books on the first place, and of all those commissions accounted for, there had been grave misreporting in deviation between actual commission paid and the amount accounted for in the books of the company.

Conclusion: After taking a look at all the above-stated points, it can reasonably be concluded that yes there was a discrepancy in accounting for all the past years.