How Has Golden-Bear Golf Changed The Revenue Recognition?
Introduction
This paper discusses the Golden Bear Golf Inc after Initial Public Offer in 1991, highlighting the accounting practices and methods were used in recognizing the company’s revenue. This paper explains the fraud occurred in recognizing the revenue and how it overstated the financial statements and increased the stock price. It also explains the fraud theory applied to the revenue recognition and the auditor’s failure in discovering the fraud and reports it to the SEC. This paper will provide methods that auditors should follow in auditing public companies and the best practices they should follow if the company changed the revenue recognition.
Background
Jack Nicklaus began playing golf since he was young, and he mastered …show more content…
Once the managements decided to change the method of revenue recognition, the auditor should have advised against this change, as the new method was new, untested, and didn’t follow Generally Accepted Accounting Standards. They should have requested a schedule with both methods, test the difference, and determine if this method will accurately recognize the revenue, and if the change was material enough that they shouldn’t use this method to begin with.
References
Knapp, Michael C. (2013). Contemporary Auditing: Real Issues and Cases. Independence, KY: Cengage Learning.
Lilly, J. Robert, Cullen, Francis T., & Ball, Richard A. (2007). Criminological Theory: Context and Consequences. Thousand Oaks, CA: Sage Publication, Inc.
Rezaee, Zabihollah (2010). Financial Statement Fraud: Prevention and Detection. Hoboken, NJ: John Wiley & sons, Inc.
Crumbley, D. Larry, Heitger, Lester, & Smith, Stevenson (2011). Forensic and Investigative Accounting. Chicago, IL: CCH Group.
Carrns, A. (1998, July 28). Golden Bear Golf to restate '97 losses at $24.7 million. Wall Street Journal - Eastern Edition. p.
This paper discusses the Golden Bear Golf Inc after Initial Public Offer in 1991, highlighting the accounting practices and methods were used in recognizing the company’s revenue. This paper explains the fraud occurred in recognizing the revenue and how it overstated the financial statements and increased the stock price. It also explains the fraud theory applied to the revenue recognition and the auditor’s failure in discovering the fraud and reports it to the SEC. This paper will provide methods that auditors should follow in auditing public companies and the best practices they should follow if the company changed the revenue recognition.
Background
Jack Nicklaus began playing golf since he was young, and he mastered …show more content…
Once the managements decided to change the method of revenue recognition, the auditor should have advised against this change, as the new method was new, untested, and didn’t follow Generally Accepted Accounting Standards. They should have requested a schedule with both methods, test the difference, and determine if this method will accurately recognize the revenue, and if the change was material enough that they shouldn’t use this method to begin with.
References
Knapp, Michael C. (2013). Contemporary Auditing: Real Issues and Cases. Independence, KY: Cengage Learning.
Lilly, J. Robert, Cullen, Francis T., & Ball, Richard A. (2007). Criminological Theory: Context and Consequences. Thousand Oaks, CA: Sage Publication, Inc.
Rezaee, Zabihollah (2010). Financial Statement Fraud: Prevention and Detection. Hoboken, NJ: John Wiley & sons, Inc.
Crumbley, D. Larry, Heitger, Lester, & Smith, Stevenson (2011). Forensic and Investigative Accounting. Chicago, IL: CCH Group.
Carrns, A. (1998, July 28). Golden Bear Golf to restate '97 losses at $24.7 million. Wall Street Journal - Eastern Edition. p.