The case examines the accounting fraud at US Foodservice (USF); a subsidiary of the Netherlands based retailer - Royal Ahold NV. It discusses in detail the system followed by USF to account for promotional allowances. The case highlights the role of USF's management in the accounting fraud who intentionally booked higher promotional allowances to show higher income in order to get extra bonuses. It also examines the reasons that led to accounting frauds such as poor financial and accounting controls, weak internal control system of the parent company over its subsidiaries, lack of transparency in accounting procedures and linking of management's compensation with the achievement of revenue targets. The case then describes the measures taken by Ahold to regain shareholders' confidence and strengthen its control systems and governance practices. The case is structured to enable students to: (1) understand the accounting of supplier rebates in the food retailing business; (2) study the reasons for lack of proper rules and standards to account supplier rebates due to which it is susceptible to misappropriation and fraud; (3) examine and analyse the accounting scandal at USF and the circumstances that led to the continuation of fraudulent accounting practices; (4) study the reasons for overlooking the observations of a financial due diligence team by Ahold during the acquisition of USF; (5) examine the methods adopted by USF employees to account for promotional allowances and the role played by the suppliers who provided false confirmations; (6) examine the necessity of a centralised control system for companies like Ahold, which have grown over the years through acquisitions; and (7) analyse the corrective measures taken by Ahold to regain shareholders' confidence. The case is aimed at MBA / PGDBA students and is intended to be part of the finance, accounting and control curriculum. The teaching note includes the abstract, teaching objectives and target audience, immediate issues, teaching approach and methodology, assignment questions, analysis of the case, feedback of case discussion, references and suggested readings.