What would Failure to prepare an adjusting entry at the end of the period to record an accrued expense cause?

Failure to prepare an adjusting entry for an accrued expense at the end of the period can lead to an understatement of expenses and liabilities on the financial statements. This misrepresentation may result in inflated profits, affecting decision-making by management and stakeholders. Additionally, it can lead to inaccuracies in cash flow projections and potentially violate accounting principles, resulting in compliance issues. Ultimately, this oversight can undermine the reliability of the financial reporting.