Chapter 7
Examining Revenue Recognition Problems
In This Chapter
Jogging your revenue recognition memory
Putting your finger on motives to alter revenues
Unearthing revenue recognition frauds
Nipping revenue frauds in the bud
Businesses exist to make money, and making money starts with selling. Revenue is the total amount of money earned by a company by selling goods, providing services, and/or allowing the use of its assets in a given period of time. In other words, revenue refers to the productive use of a company’s assets or capital. Revenue is also called sales and turnover.
Unfortunately, sometimes businesses want you to believe that they are making more money than they really are. According to the U.S. Securities and Exchange Commission (SEC), revenue recognition fraud schemes were the most prevalent among the various financial statement fraud schemes committed between 2000 and 2008. A March 1999 report sponsored by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission, Fraudulent Financial Reporting 1987–1997: An Analysis of U.S. Public Companies, noted ...
