Revenue Recognition Essay Example for Free

Revenue Recognition Essay The revenue recognition principle is a foundation of accrual accounting and one of the main principles of GAAP. The revenue recognition principle is a set of guidelines that helps accountants to identify when a revenue event has taken place and how to appropriately record cash exchanges before, during, and after the revenue event. According to the revenue recognition principal, revenue must (1) be realized or realizable and (2) earned, in order to be recognized. According to the SEC revenue is realized when (1) Persuasive evidence of an arrangement exists, (2) Delivery has occurred or services have been rendered, (3) The seller’s price to the buyer is fixed or determinable, and (4) Collectability is reasonably assured. It is essential for the users of financial statements to know that the real revenues are recorded and disclosed and not fraudulent revenues. A constraint of GAAP that is relevant to the revenue recognition principle is the materiality principle. Fraudulent revenues will create misstatements that could have a material effect on the decisions of financial statement users. In 2002, WorldCom a telecommunication company, filed for bankruptcy. It was later revealed that the company was involved with improper accounting in two major forms. First WorldCom inflated revenues to increase profits, thereby increasing stock prices, and increasing the satisfaction of stakeholders. Second, the company understated line costs. Revenue is important to users of financial statements because it helps them evaluate a company’s performance and prospects. WorldCom violated the revenue recognition principle by creating an account that did not come from the operating activities of the company’s sales channel. WorldCom named this fictitious schedule corporate unallocated account. This action was unethical and illegal, and gave the company a very bad reputation. According to paragraph 25 of PCAOB Auditing Standard No. 5, because of its importance to effective internal control over financial reporting, the auditor must evaluate the control environment at the company. As part of evaluating the control environment, the auditor should assess the following, †¢Does managements philosophy and operating style promote effective internal control over financial reporting? Has the company developed sound integrity and ethical values, and more importantly, do all employees understand these values, particularly top management? †¢Does the Board or audit committee understands and exercises oversight responsibility over financial reporting and internal control? The control environment is what sets the tone for an organization and is the foundation for all other components of internal control. It provides discipline and structure and reflects the ethical values, integrity and competencies of the organization. The control environment is very important to effective internal control over financial reporting to an audit client like WorldCom, because good designs can prevent and detect frauds and errors. But because WorldCom had such a poor control environment, the company would require more testing for an audit. This shows that the board did not exercise oversight responsibilities over financial reporting or internal controls. According to PCAOB Auditing Standard No. 5 paragraphs 26 27, the top-side adjusting journal entries are when the executives record the entries, or when the accountants are asked by the executives to record the entries. A valid use of top-side journal entries is to allocate income or expenses from a parent company to its subsidiaries. However, top-side adjustments can also be used to improperly reduce liability accounts and increase revenue or decrease expenses. Companies undergoing mergers, acquisitions or restructuring are particularly susceptible to the fraudulent misuse of top-side journal entries. Necessary evidence to obtain include sales invoices, credit memos, customer master file list, analytical procedures, and accounting systems. In the auditing of WorldCom, we would require adjusting journal entries, the MonRev spreadsheets detailing revenue, the corporate unallocated schedule, the automated process for closing and consolidating operational revenue numbers, and propriety of a top-side journal entry made to their revenue account. We would also need the authorization of the CFO or any officers. Good ethics is very significant for an organization. When ethical dilemmas are not recognized there could be serious consequences that could lead to imprisonment. In addition, a company will lose its reputation instantly. Assuming that Lorenzo and Taranto knew that the entries being proposed by Scott Sullivan were fraudulent they should not have recorded the journal entries as they were directed. If WorldCom had a control environment where it took more than three employees to conspire to commit such a large fraud, and where the board checked on the corporate adjusting entries, this could have been prevented. Employees should be trained and guided by a code of ethics and observed with appropriate influences for violation

Economic Structure Of The Mafia :: essays research papers

The Mafia is viewed by many people as a bunch of gangsters like those that they might see on movies such as Goodfellas, The Godfather, or Donnie Brascoe. In all actuality the Mafia represents much more than that, it is an entity within itself. The original Sicilian Mafia was just a group of families controlling certain territories in which they each laid claim to. These families were headed by a dominant male and were usually in competition with other families. The members of these families would engage into various "illegal and legal businesses with each other and outsiders" (Fiorienti and Peltzman 38). In the introduction to The Economics of Organized Crime, Fiorentini and Peltzman claim that between the years of 1860and maybe ranging all the way to 1957, the "Mafia was not a membership organization but a natural outgrowth of culture, politics and law enforcement" (Peltzman 38). Many have tried to eliminate the Mafia from its’ "control" of the underworld and its’ stranglehold on politicians and government. Under the fascist movement in the late 20’s and 30’s of Cesare Mori, Mori tried to eliminate the Mafia in any way in which he could. This attempt at elimination was quite unsuccessful since the Mafia’s base was so far ranging. ""Arlachhi (1986 44-5) concluded in 1983 "there does not exist a centralized criminal organized called the Mafia… The cosca mafiosa is a simple organism but a solid one, without formalism or bureaucracy. Within it are neither statutory ordinances, initiation rites nor courts of judgment"" (Fiorienti and Peltzman 38). This is in contrast as to what others recognize as organized crime. In direct retrospect to his earlier writings, Arlacchi claims that, through interviews with Mafia members, there is a more formal organization within the Mafia and that the Mafia does have initiations. The United States Mafia definitely was different than the Sicilian Mafia when trying to generalize them. The American Mafia consisted of only around 24 families whereas the Sicilian Mafia consisted of hundreds of families. These families were much larger than their Sicilian counterparts and that the families were most definitely organized and formal. " A detailed case-study of one of these families and its legal and illegal activities as of 1970 (Anderson, 1979) found that the Mafia family itself was not a firm; rather, its members entered into various businesses on their own account" (Fiorentini and Peltzman 39).

The tremendous growth experienced

In Nigerian tertiary Institutions In the last two decade without a corresponding increase In bed space had resulted In acute shortage of rooms in the hostel thereby overstretching the capacity of the existing structures they were originally meant for. Hostel accommodation Is one of the essential factors in every learning environment. In Nigeria most Institution of higher learning are owned by the government as such accommodation cannot be adequately provided to cater for the highly populated Institutions, Inadequacy andInsufficient hostel accommodation has led to overcrowding In rooms and some students living outside campus which In turn affect their learning. Built-operate- Transfer (BOOT) emerged as one of the tool In helping to address the situation which becomes a burden to government. BOOT is a type of project delivery that involves different parties whom each contribute in order to see the success of the project. It is a private agreement to build and operate in a public infras tructure project.The consortia then secure their own finance to sponsor the project. The consortium then own, maintains and manage the facility for an agreed concessionary period and recover their investment through charges or toll free. After the concessionary period, the consortia transfer the ownership and operation of the project to the government or relevant authority. This study takes Federal College of education (Technical) Biochip as a case study.Government Ministries, such as Federal Ministry of Education who govern the affairs of the school were consulted. Questionnaire and verbal interview were employed in data collection. After the analysis it was found that construction of hostels under BOOT is yielding a positive impact. The findings should serve as a good baseline for the government in solving the accommodation problem and overcrowding in the higher institution of learning in Nigeria.Therefore there is need for the government to give more support to Public Private Par tnership sector so that accommodation problem will be solved. By Amnion The tremendous growth experienced in Nigerian tertiary institutions in the last two aced without a corresponding increase in bed space had resulted in acute structures they were originally meant for.Hostel accommodation is one of the essential factors in every learning environment. In Nigeria most institution of higher adequately provided to cater for the highly populated institutions, inadequacy and insufficient hostel accommodation has led to overcrowding in rooms and some students living outside campus which in turn affect their learning. Built-operate- Transfer (BOOT) emerged as one of the tool in helping to address the situation which

Essay on Surrealism and Harlem Renaissance Two Historical...

Running head: SURREALISM AND HARLEM RENAISSANCE Surrealism and Harlem Renaissance Two Historical Art Periods Elisa Montoya Western Governor’s University RIWT Task 1 May 13, 2013 SURREALISM AND HARLEM RENNAISANCE Comparing and Contrasting the Two Art Periods â€Å"Surrealism and Harlem Renaissance† 2 While there are many different historical art periods I will bring together two that I found to be extremely interesting. There are so many wonderful facts about all the different art periods that I’ve chosen to bring to life two â€Å"Surrealism and the Harlem Renaissance†. These art periods have many differences yet their evolution have many of the same reasons for existing. The artistic evolution of â€Å"Surrealism† commenced in France in†¦show more content†¦Ã¢â‚¬Å"The importance that art and culture played toward this goal cannot be overstated as During the Harlem Renaissance the utilization of artists, poets, and jazz music were employed instead of political means to achieve the goals of equality and civil rights† (Biography, 2012). The relationships between the two historical art periods existed in the French Colonies 3 territories belonging to the Caribbean and Africa. These French colonies native Black graduates whom verbalized French and regained their African heritage utilizing the values Harlem Renaissance and Surrealism. The ideals of the father of Surrealism â€Å"Andrà © Breton† rooted this evolution therefore linking Harlem Renaissance’s era of black intellectuals. Such as Richard Wright who eluded segregation and racism in the Amalgamated States by fleeing to France. Others included Claude Mckay as well as Langston Hughes. This evolution additionally known as the â€Å"Negritude evolution† utilized the ideals of the artists in accordance with the notions of surrealism. The similarities lie within the struggle to shatter the conventional norms and discernment of society with surrealism endeavoring to do so toward the prudish and aristocratic society that imbue the history of France leading up to the crusade. The HarlemShow MoreRelatedRIWT task 1 direction Essay example669 Words   |  3 Pagesimagination, values, and emotions. Introduction:    Works of art vary greatly across genres and time periods. Some works of the humanities seem to have originated from the minds of specific individuals or from social and cultural influences, while other works of art were influenced by the styles and characteristics of earlier periods and are often a continuation of or reaction to those artistic styles. For example, classical art from ancient Greece and Rome was revived during the neoclassicalRead MoreIwc1 Literature, Arts and Humanities Essay10028 Words   |  41 PagesIWC1 Test 1.02 Module Pre-Test Question 1: Multiple Choice The historical revival of Classical culture began during the: a) Middle Ages b) Renaissance c) Baroque Era d) Romantic Era Feedback: The correct answer is b. The historical revival of Classical culture began during the Renaissance. Question 2: Multiple Choice Which of the following was a key feature of ancient Chinese humanism? a) An emphasis on theoretical philosophy. b) A subordination of intellectual life to religiousRead MoreExploring The Different Values Placed On Art Works Essay9463 Words   |  38 PagesAS91487 3.6 Examine the different values placed on art works Mona Lisa – Leonardo Da Vinci 1506 - The Mona Lisa, 1503 - 1506, painted on poplar wood (77 x 53cm) with oil paint. This composition was created by Leonardo Da Vinci, a Quattrocento artist of the Italian Renaissance between the years of 1503 - 1506. The Mona Lisa is unquestionably acclaimed, with great artistic merit and value, to be the most highly revered, renowned painting. This form of art is a portrait, in which Leonardo Da Vinci hasRead MoreEssay about Summary of History of Graphic Design by Meggs14945 Words   |  60 PagesChapter 1: The Invention of Writing - From the early Paleolithic to the Neolithic period (35,000 BC to 4,000 BC), early Africans and Europeans left paintings in caves, including the Lascaux caves in Southern France. - Early pictures were made for survival and for utilitarian and ritualistic purposes. - Petroglyphs are carved or scratched signs on rock. - These images became symbols for what would be the first spokenlanguage. - Cuneiform – Wedged shaped writing, created in 3000BC. StartedRead MoreChapter 33 – Early 20th Century5648 Words   |  23 PagesChapter 33 – Early 20th Century Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. Throughout history, artists have regularly served political ends by using their art to make visual statements. Which of the following artists has created an overtly political statement with his/her work? |a. |Dorothea Lange | |b. |John