Wareham SC Systems, Inc. 1. What is (are) Wareham’s current revenue recognition policy (ies)? 2. Using the limited information in the case, do the industry characteristics or the current revenue recognition policies encourage manipulation of revenues? If so, how could Wareham manipulate its earnings? 3. For each of the specific contracts described in the case, please describe the best revenue recognition policy considering the criteria in SAB 101. (Onsetcom, Cataumet, Sandham, XLSemi, Technical Devices and Ashaban)
TechMall.com’s Revenues Note Exhibit 3, Year 2 cash flows, the “add total change in cash” is an incorrect number. It should be $1,371,350.
1. What are the revenue streams This should include: a. The industry environment b. Firm strategy c. Financial results for the company over the periods presented and compared to its industry results. d. Outlook for the future
Using this information, would your invest in this company? Why?
Microsoft’s Financial Reporting Strategy 1. What are the factors that likely explain the difference between Microsoft’s market value of equity and its reported book value of equity? 2. What effect did Microsoft’s software capitalization policy have on Microsoft’s income statement and balance sheet? 3. What effect did Microsoft’s revenue recognition policy have on its income statement and balance sheet? 4. Do these policies appear to be justifiable under GAAP? 5. What are the risks of Microsoft’s current policies? 6. Do you feel that what Microsoft is doing is fraudulent?
Controls at the Sands Hotel and Casino 1. Identify the internal control procedures that the Sands currently has in place? For each one you find, list the type of control it is. 2. Are their any control procedures that might improve the Sands internal control?
The Crisis at Tyco-A Director’s Perspective 1. Using the information in the case, diagram the lines of reporting between Tyco’s management, Board of Directors, board committees and the internal and external auditors. 2. Given the events at Tyco, how would you reorganize the reporting structure, Board of Directors or
