Revenue Recognition Changes Caused Fraud

1139 WordsOct 18, 20155 Pages
Revenue Recognition Changes Caused Fraud There were 347 alleged cases of fraud involving public company according to Fraudulent Financial Reporting: 1998-2007 sponsored by Committee of Sponsoring Organizations of the Treadway Commission (COSO, 2010) that were investigated by Securities and Exchange Commission (SEC) on May 2010, which is showing 53 increased in the number of fraud when compared to the 1987-1997 study (p.5). COSO’s result is a sad number in a 10 year period, which averaging close to 35 accounting frauds a year (p.5). COSO’S study shows out of the nearly 350 financial frauds investigated 60% were identified to involved improper revenue recognition and 89% were recognized the CEOs and/or CFOs involvement (p.5). COSO’s research is depressing to know that who you called your “big boss”, “superior”, or “Chief” and the persons who give orders, and the person who makes business decision or person you in trust the company are the crooks themselves (p.5). Seemingly, the accounting system pay no heed to whistle-blowers to stay quiet, and prolong to break the news. COSO’s study revealed a total of 120 billion of cumulative misstatements and misappropriation from about 350 accounting frauds, which summarized the average of 400 million per fraud (p.5). COSO’s findings is heart-breaking to think how human utilized their own intelligence, expertise and choose to be foolish to mismanage the opportunity available and taking advantage of the weaknesses of the accounting

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