Employee Theft
Small co client (vehicle repairers) disappointed with profit of latest accounts which all seemed to revolve around a drop in the gross profit margin. Discussed various possibilities and client has now come back a week later saying they have since discovered that one of their employees had been doing cash jobs and on occasions raising an invoice but then removing it from their standalone sale invoice system before the director took the relevant details for entry onto his Sage package at home.
So obviously all the part and labour costs (VAT reclaimed as appropriate) are in the accounts but some of the income associated therewith was never recorded nor received.
My first experience of client staff theft and not sure what adjustment if any might be required? Initial thoughts are that no adjustment required as client has suffered the loss and surely can't be liable for anything further beyond their control.
Apparently the employee in question is on holiday and has no idea that the game is effectively up!
What about the banks ?
If you know the amount involved you could (should) increase sales by that amount and reduce profits by showing the same amount as a deduction for theft by staff.
The end result is the same, but, it would pursuade bank managers etc that the business is basically sound and not actually losing trade.
Leave as is
I've had this before, with a mobile caterer (read "burger vans").
I think your initial thought is correct. Certainly worth disclosing in a note in the whitespace on the return, though.