During your weekly meeting, the Director of Accounting has shared with you the topics discussed at a recent Association of Certified Fraud Examiners (ACFE) meeting. Of particular interest was the agenda item about how some companies have gotten in regulatory trouble with the SEC over their revenue and expense recognition practices. While you both are confident that there are no issues relating to this at your company, you both decided that you wanted to learn more about these cases.
The Director of Accounting wants you to research two such cases and write a summary report to present at the next Accounting Department meeting. The director believes that understanding what has happened to other companies in this area of accounting can help prevent issues in your company.
The Director provides you with the SEC website that they have used in the past to do article searches:
You are asked to select two recent SEC actions against companies (not individuals) that relate to revenue and expense recognition and Prepare a Word document that:
- summarizes reasons for the SEC actions.
- identifies the SEC issues related to accounting data and/or operations and the remedial actions assigned and/or penalties given to the company.
- critiques the remedial actions/penalties.
- Gives an opinion as to whether you believe they will be effective in preventing future violations by the company.