Harry Potter magic failed to save the drop in profit of St.Ives(the printer of Harry Potter books) due to accounting errors in the company’s book. The error was discovered in the in store promotion division of the company. The bulk of the errors occurred between October and December last year and included mistakes over customer rebates, a failure to write off unrecoverable costs, and an over-valuation of work in progress. The errors followed a rapid expansion of the St Ives in-store printing division.
The finance director, Ray Morley, declined to name the financial controller responsible but said “the errors started with him and in an ideal world they would have been picked up earlier … There is no suggestion whatsoever that this was in any way deliberate”. Mr Morley accepted ultimate responsibility.
But could it be that this was a case of extremely high expectations from the staff pushing them to cook the numbers. Considering the fact that most of the errors happened at the time of rapid expansion, the company might not have been able to keep upto the expectations of the outsiders and the expansion did not go well financially, pressurizing the staff to make numbers look more appealing than the actual.