bring those risks to the attention of the financial statement users. The second purpose of this memo‚ as per your request‚ is to specifically address the control issues arising from OVS’s new Internet business. Engagement Risk and Financial Reporting Risk Analysis (CAS 315) We have performed an analysis of the Engagement Risk (ER) and Financial Reporting Risk of st the OVS financial statement audit for the year
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are needed for the hardware to work perfectly‚ it cannot be within the scope of ASC 985-605. 2.) On the basis of the response to Question 1‚ discuss the revenue recognition accounting literature that would be applied to each unit of accounting in the February 1‚ 2012‚ arrangement. Provide the cumulative revenue recognized and deferred revenue balance related to the Buffett arrangement as of April 30‚ 2012. Coconut’s February 1‚ 2012 arrangement with Buffet is within the
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Financial accountants and independent auditors commonly face challenges Abstract Financial accountants and independent auditors commonly face challenging technical and ethical dilemmas while carrying out their professional responsibilities. This case profiles an accounting and financial reporting fraud orchestrated by the chief financial officer (CFO) of a major public company and his subordinates. The CFO‚ who was a CPA‚ took extreme measures to conceal the fraud from his company’s audit
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Case 06-12 Outsourcing Services‚ Inc. Outsourcing Services‚ Inc. (OSI)‚ a SEC registrant‚ provides a variety of EDP and payroll processing services to third parties. OSI recently has introduced a new service line to provide product help-line support services through customer service representatives (CSRs) who are employees of OSI. On January 1‚ 2004‚ OSI entered into a service contract with Company X. Pursuant to the terms of the contract‚ OSI’s CSRs will provide technical support for Company X’s
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time of sale‚ Essential should record as additional cost of goods sold‚ not as a reduction in revenue‚ because the free product does not represent a return‚ refund‚ or rebate of a portion of the sales price paid by the customer. Point and Loyalty Programs Customers can redeem specified quantities of points for awards such as free or discounted products. For this situation‚ Essential should not deferred revenue related to points awarded to customers. Part Two: Development cost Application Development
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goals set by management. In the mid-90s a goal was set to hit revenues of $1 billion. This goal was deemed manageable based on their operating profit that they had shown over the years. As time passed‚ the goal became more difficult and the sense of urgency to claim revenue became a must. Several situations led to fines that would later be placed on the company’s executives including: Christopher Crawford [CFO‚ CPA]: Claimed revenue from a barter transaction that passed materiality by auditors
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000 59.52% 2013 4‚250‚000 0 4‚250‚000 100.00% 1‚619‚200 1‚669‚200 -50‚000 Cost Incurred to Date Estimated Costs Total Estimated Costs % Completed Revenue Expense Gross Profit 400‚000 1‚980‚800 350‚000 2‚230‚800 50‚000 -250‚000 2011 Account 1) Record Construction Costs CIP Various Accounts 2) Record Revenue Construction Expense CIP Revenue 3) Billings A/R Billings on CIP Dr 350‚000 350‚000 Cr 2012 Dr 2‚150‚000 Cr 2013 Dr 1‚750‚000 Cr 2‚150‚000 1‚750‚000 350‚000 50‚000
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Revenue Recognition: IFRS and FASB Convergence With the growth of international business there is a need to standardize financial statements globally. Presently there are “approximately 120 foreign private issuers currently that report to the Commission using IFRS financial statements.” By standardizing accounting practices investors will be able to make informed decisions based on comparability and accuracy of financial statements. The SEC released this statement in 2008‚ “We believe that
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a) -Revenues are inflows of assets or settlements of liabilities or both. Revenues come from activities of the entity’s central operations. -Gains are increases in net assets and from peripheral or incidental transactions of an entity. -The difference between gains and revenues depend to a great extent on the typical activities of a company. For example‚ when McDonald’s sells a hamburger‚ it records the selling price as revenue. However‚ when Mc Donald’s sells land‚ it records any excess of
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of HKFRS 15 Revenue is the gross inflow of economic benefits during the period arising in the course of business of the ordinary activities of the entity‚ other than increases relating to contributions from equity participants. It is of most significance of both the creditors and the shareholders for decision-making‚ and therefor it is attached great importance of it’s reliable and accuracy. The most crucial element of revenue‚ the criteria of Revenue Recognition Principles‚ has been the
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