Ways to recognize revenues and massage the financial statements of the organization
As the business environment has evolved, managers have found more and inventive ways to recognize revenues and “massage” the financial statements of their organizations. As an auditor in your firm, you have seen many of these new ways and have heard your Managing Partners discussing these emerging issues, especially as they apply to sales returns and the provisions for sales returns.
As such, you have been tasked by your Managing Partner to generate a “White Paper” concerning this topic.
Of specific concern to your Managing Partner are:
What is the authoritative literature addressing revenue recognition when right of return exists?
What is meant by “right of return”?
What is meant by “Bill and Hold”?
What are the accounting procedures when there is a right of return?
When goods are sold on a bill-and-hold basis, what conditions must be met to recognize revenue upon receipt of the order?
Proper formatting, grammar and presentation are expected to be present in this “project,” along with proper citations according to APA format guidelines.
It is expected you will have at least five (5) sources, and those sources are to be of high quality (no Wikipedia references, and minimal textbook references.) For each Wikipedia reference, an immediate five (5) point reduction will be incurred for each reference. For each textbook reference over two (2) references, an immediate five (5) point reduction will be incurred for each reference over two (2).
This “project” shall be a minimum of five (5) pages, not including the cover page or bibliography, and shall be no longer than fifty (50) pages. In a professional accounting environment, a White Paper is as long as it needs to be to properly present the topic, and the results of research.
This project is an individual effort, and as such, will be run through “turnitin” to check for duplication or plagiarism. Any plagiarism found will result in an immediate zero (0) on this project, and will initiate a report to the Provost for academic dishonesty. In other words, do your own work, and don’t cheat.
One of the sources you are recommended to use is the FASB Codification Website.