La Real Fábrica de Tejidos de la Villa de Ezcarayun caso de manipulación contable

Abstract

This paper aims to demonstrate the usefulness of accounting information, both internal and external, to show more optimist situations than those which really exist. The documentary evidence that supports this paper is based on the accounting study of the Royal Textile Factory in the ville of Ezcaray of the XVIII Century. In this Royal Textile Factory, there was serious manipulation of the records and of the accountancy books in order to cover up losses generated in the process, apart from frauds and misuse of company funds. The financial accounting was systematically used to forge accounting records and conceal from its possible buyers -among whom the King was included- the transfer of a bankrupted company. Cost studies were used -after the discovery of the bankruptcy- as the main documentary source to cover up losses generated in the process and to show the possible viability of the company, and thus justify the request of funds to the King.