Discussion

Hilton, R.W. and Platt, D.E. (2017). Managerial Accounting: Creating Value in a Dynamic Business Environment (11th ed.). New York, NY: McGraw-Hill Education. ISBN 9781259569562

One of the most important factors is reliability of financial statements. Reliability is further ensured by audit of financial statements. At last but not least, financial statements should be made in a comparable format either with previous periods or with the competitors.

The case focuses on a sales agreement with multiple deliverables. The critical issue is determining

Marshall, D.H., McManus, W.W. & Viele, D.F. (2004). Accounting: What the Numbers Mean (6th ed.). New York: McGraw-Hill.

Rich, J., Jones, J., Heitger, D., Mowen, M., & Hansen, H. (2012). Cornerstones of Financial & Managerial Accounting. Mason, OH: South-Western/Cengage

a. “Analytical procedures are an important part of the audit process and consist of evaluations of financial information made by a study of plausible relationships among both financial and nonfinancial data. Analytical procedures range from simple comparisons to the use of complex models involving many

P., Tsay, B., & Olds, P. R. (2011). Fundamental managerial accounting concepts (6th ed.). New York, NY: McGraw-Hill Irwin.

(2) Whether the customer received an inducement to agree to the term. (The supplier may have offered the customer a choice: a lower price but subject to an exemption clause or a higher price without the exemption.)

Revenue recognition is a primary cause of financial statement restatements, are related to fraudulent behavior, cause market value and capitalization drops, and cause higher enforcement efforts to ensure fairness and integrity in financial statements (Kieso, Weygandt, & Warfield, 2008). Most fraud cases that involve company executives involve revenue recognition is some manner, whether to steal company money and hide the actions or in efforts to meet financial analysts expectations to maintain stock prices and still maintain job positions and bonuses. Each case has led to material misstatements where financial statements had to be restated with SEC, caused market and capitalization drops for the companies, and caused higher enforcement efforts by SEC. And, each case has effected financial statement users and has caused uncertainties in minds of investors, which compromise the companies. When

Kimmel, P. D., Weygandt, J. J., & Kieso, D. E. (2011). Financial accounting: Tools for business decision making (6th ed.). Hoboken, NJ: John Wiley & Sons.

Brewer, Peter CView Profile; Juras, Paul EView Profile; Brownlee, E Richard, IIView Profile. Issues in Accounting Education18.1 (Feb 2003): 49-69.

to the book value of the receivables. The factor normally receives the payment directly from

Bookkeeping or other services related to the accounting records or financial statements of the audit client;

The legal issue is whether a clear offer and acceptance is materialized by both of the parties to establish an accord for a contract that have legal obligation.

For an offer to be satisfied, there are rules to be considered. The offer has to be complete, promissory, intention to undergo a contract when accepted, and focused on an individual or a group. In addition,