Revenue Recognition Essay Example

Revenue Recognition Essay Example Revenue Recognition Essay Revenue Recognition Essay The gross acknowledgment rule is a foundation of accrual accounting and one of the chief rules of GAAP. The gross acknowledgment rule is a set of guidelines that helps comptrollers to place when a gross event has taken topographic point and how to suitably enter hard currency exchanges before. during. and after the gross event. Harmonizing to the gross acknowledgment principal. gross must ( 1 ) be realized or realizable and ( 2 ) earned. in order to be recognized. Harmonizing to the SEC gross is realized when ( 1 ) Persuasive grounds of an agreement exists. ( 2 ) Delivery has occurred or services have been rendered. ( 3 ) The seller’s monetary value to the purchaser is fixed or determinable. and ( 4 ) Collectability is moderately assured. It is indispensable for the users of fiscal statements to cognize that the existent grosss are recorded and disclosed and non deceitful grosss. A restraint of GAAP that is relevant to the gross acknowledgment rule is the materiality rule. Fraudulent grosss will make misstatements that could hold a material consequence on the determinations of fiscal statement users. In 2002. WorldCom a telecommunication company. filed for bankruptcy. It was subsequently revealed that the company was involved with improper accounting in two major signifiers. First WorldCom inflated grosss to increase net incomes. thereby increasing stock monetary values. and increasing the satisfaction of stakeholders. Second. the company unostentatious line costs. Gross is of import to users of fiscal statements because it helps them measure a company’s public presentation and chances. WorldCom violated the gross acknowledgment rule by making an history that did non come from the operating activities of the company’s gross revenues channel. WorldCom named this fabricated agenda corporate unallocated history. This action was unethical and illegal. and gave the company a really bad repute. Harmonizing to paragraph 25 of PCAOB Auditing Standard No. 5. because of its importance to effectual internal control over fiscal coverage. the hearer must measure the control environment at the company. As portion of measuring the control environment. the hearer should measure the followers. Does management’s doctrine and operating manner promote effectual internal control over fiscal coverage? Has the company developed sound unity and ethical values. and more significantly. make all employees understand these values. peculiarly top direction? Does the Board or scrutinize commission understands and exercisings oversight duty over fiscal coverage and internal control? The control environment is what sets the tone for an organisation and is the foundation for all other constituents of internal control. It provides subject and construction and reflects the ethical values. unity and competences of the organisation. The control environment is really of import to effectual internal control over fiscal coverage to an audit client like WorldCom. because good designs can forestall and observe frauds and mistakes. But because WorldCom had such a hapless control environment. the company would necessitate more testing for an audit. This shows that the board did non exert inadvertence duties over fiscal coverage or internal controls. Harmonizing to PCAOB Auditing Standard No. 5 paragraphs 26 A ; 27. the top-side adjusting diary entries are when the executives record the entries. or when the comptrollers are asked by the executives to enter the entries. A valid usage of top-side journal entries is to apportion income or disbursals from a parent company to its subordinates. However. top-side accommodations can besides be used to improperly cut down liability histories and increase gross or lessening disbursals. Companies undergoing amalgamations. acquisitions or reconstituting are peculiarly susceptible to the deceitful abuse of top-side journal entries. Necessary grounds to obtain include gross revenues bills. recognition memos. client maestro file list. analytical processs. and accounting systems. In the auditing of WorldCom. we would necessitate seting journal entries. the MonRev spreadsheets detailing gross. the corporate unallocated agenda. the machine-controlled procedure for shutting and consolidating operational gross Numberss. and properness of a top-side diary entry made to their gross history. We would besides necessitate the mandate of the CFO or any officers. Good moralss is really important for an organisation. When ethical quandary are non recognized there could be serious effects that could take to imprisonment. In add-on. a company will lose its repute immediately. Assuming that Lorenzo and Taranto knew that the entries being proposed by Scott Sullivan were deceitful they should non hold recorded the diary entries as they were directed. If WorldCom had a control environment where it took more than three employees to cabal to perpetrate such a big fraud. and where the board checked on the corporate adjusting entries. this could hold been prevented. Employees should be trained and guided by a codification of moralss and observed with appropriate influences for misdemeanor

Biography of Atlanta Mass Murderer Mark Orrin Barton

Biography of Atlanta Mass Murderer Mark Orrin Barton Known as being one the largest mass murderers in Atlantas history, day-trader Mark Barton, 44, went on a killing spree on July 29, 1999, at two Atlanta-based trading firms: All-Tech Investment Group and Momentum Securities. Upset over seven weeks of big losses in day trading, which had brought him to financial ruin, Bartons killing spree resulted in 12 people killed and 13 injured at the two companies. After a daylong manhunt and surrounded by police, Barton committed suicide by shooting himself at an Acworth, Georgia, gas station when his capture became imminent. The Killing Spree At around 2:30 p.m. on July 29, 1999, Barton entered Momentum Securities. He was a familiar face around there and just like any other day, he began chatting with the other day traders about the stock market. Dow Jones was showing a dramatic drop of about 200 points adding to a week of disappointing numbers. Smiling, Barton turned to the group and said, Its a bad trading day, and its about to get worse. He then took out two handguns, a 9mm Glock and a .45 caliber Colt, and began firing. He fatally shot four people and injured several others. He then went across the street to All-Tec and began shooting, leaving five dead. According to reports, Barton had lost an estimated $105,000 in about seven weeks. More Murders After the shooting, investigators went to Bartons home and discovered the bodies of his second wife, Leigh Ann Vandiver Barton, and Bartons two children, Matthew David Barton, 12, and Mychelle Elizabeth Barton, 10. According to one of the four letters left by Barton, Leigh Ann was murdered the night of July 27, and the children were murdered on July 28, the night before the shooting spree at the trading firms. In one of the letters, he wrote that he did not want his children to suffer without having a mother or father and that his son was already showing signs of the fears that he had suffered with throughout his life. Barton also wrote that he killed Leigh Ann because she was partly to blame for his demise. He then went on to describe the method he used to kill his family. There was little pain. All of them were dead in less than five minutes. I hit them with the hammer in their sleep and then put them face-down in the bathtub to make sure they did not wake up in pain, to make sure they were dead. The body of his wife was found under a blanket in a closet and the childrens bodies were found in their bed. Prime Suspect in Another Murder As the investigation into Barton continued, it was revealed that he had been the prime suspect in the 1993 murders of his first wife and her mother. Debra Spivey Barton, 36, and her mother, Eloise, 59, both of Lithia Springs, Georgia, went camping on Labor Day weekend. Their bodies were found inside their camper van. They had been bludgeoned to death with a sharp object. There was no sign of forced entry and although some jewelry was missing, other valuables and money had been left behind, leading investigators to put Barton on top of the list of suspects. A Lifetime of Trouble Mark Barton seemed to make bad decisions most of his life. In high school, he showed great academic potential in math and science, but started using drugs and ended up in hospitals and rehabilitation centers after overdosing several times. Despite his drug background, he got into Clemson University and, in his first year, he was arrested and charged with burglary. He was placed on probation, but that did not deter his drug use and he ended up leaving Clemson after suffering a breakdown. Barton then managed to get into the University of South Carolina, where he earned a degree in chemistry in 1979. His life seemed to level out some after college, although his drug use continued. He married Debra Spivey and in 1998 their first child, Matthew, was born. Bartons next brush with the law happened in Arkansas, where the family had relocated to due to his employment. There he began to show signs of severe paranoia and often accused Debra of infidelity. As time went on, he became increasingly controlling over Debras activities and exhibited strange behavior at work. In 1990 he was fired. Furious by the firing, Barton retaliated by breaking into the company and downloading sensitive files and secret chemical formulas. He was arrested and charged with felony burglary but got out of it after agreeing to a settlement with the company. The family moved back to Georgia where Barton got a new job in sales at a chemical company. His relationship with Debra continued to deteriorate and he began having an affair with Leigh Ann (later to become his second wife), who he had met through his work. In 1991, Mychelle was born. Despite the birth of a new child, Barton continued seeing Leigh Ann. The affair was no secret to Debra, who, for unknown reasons, decided not to confront Barton. Eighteen months later, Debra and her mother were found dead. Murder Investigation From the start, Barton was the prime suspect in the murders of his wife and mother-in-law. The police learned of his affair with Leigh Ann and that he had taken out a $600,000 life insurance policy on Debra. However, Leigh Ann told the police that Barton was with her over Labor Day weekend, which left investigators without evidence and a lot of speculation. Unable to charge Barton with the murders, the case was left unsolved, but the investigation was never closed. Due to the murders being unsolved, the insurance company refused to pay Barton, but later lost a lawsuit Barton filed and he ended up getting the $600,000. New Beginnings, Old Habits It was not long after the murders that Leigh Ann and Barton moved in together and in 1995 the couple married. However, just like what happened with Debra, Barton soon began showing signs of paranoia and distrust towards Leigh Ann. He also began losing money as a day-trader, big money. The financial pressures and Bartons paranoia took a toll on the marriage and Leigh Ann, along with the two children, left and moved into an apartment. Later the two reconciled and Barton rejoined the family. Within months of the reconciliation, Leigh Ann and the children would be dead. Warning Signs From interviews with those who knew Barton, there were no obvious signs that he was going to flip out, murder his family, and go on a shooting spree. However, he had earned the nickname Rocket at work because of his explosive behavior while day trading. This type of behavior was not all that unusual among this group of traders. It is a fast, high-risk game, where gains and losses can happen quickly. Barton did not talk much about his personal life with his fellow day traders, but many of them were aware of his financial loses. All-Tech had stopped allowing him to trade until he put money in his account to cover his losses. Unable to come up with the money, he turned to other day-traders for loans. But still, none of them had any idea that Barton was harboring resentment and about to explode. Witnesses later told police that Barton seemed to purposely seek out and shoot some of the people who had loaned him money. In one of the four letters he left in his home, he wrote about hating this life and having no hope and being terrified each time he woke up. He said that he did not expect to live much longer, just long enough to kill as many of the people that greedily sought my destruction. He also denied killing his first wife and her mother, although he admitted that there were similarities between how they were killed and how he killed his current wife and children. He ended the letter with, You should kill me if you can. As it turned out, he took care of that himself, but not before ending the lives of many others.