Describes the accounting adjustments made by the management that is subsequently audited and found to be without any operational basis. The auditors allege that sales have been inflated, adjustments have been made in receivables and inventories, and profit figures increased. This happens when the profit and loss account is to be incorporated in the prospectus for a new shares issue. The auditors explain the modus operandi of the adjustments. The case requires the reconstruction of the profit and loss account and other related accounts on the basis of the auditors' subsequent findings.