Who Signs Your Check: Group Project
UNIVERSITY OF MARYLAND UNIVERSITY COLLEGE
Who Signs Your Check Group Project
Group 5
Marc Friedman
Jefferson Kinnay
Vincent Mayer
Tesleem Subair – No posts yet??
Kent Williams
ACCT 635 9040
Accounting Ethics
Professor Larry Wolod
February 19, 2015
Contents
Facts 2
Procedural History 2
Issue 2
Rule 2-3
Application / Analysis 3-4
Conclusion 4
Bibliography 5
Work Accomplished…………………………………………………………………………………………………………………………………6
Facts
Willie Lowman is the internal auditor for Dead Salesman Printing who is currently in the process of auditing the company’s account receivables. He finds that the company is constantly crediting and debiting accounts receivable. The accounts receivable clerk who is a CPA has been entering debits and credits on the A/R account on a regular basis, and at this stage they don’t know how many credits are valid or to what extent they are valid. Willie has also found that the A/R department is significantly understaffed which means that they do not have the staff and/or resources to verify the extent and validity of customer claims. Willie has found many instances especially in large accounts where the customer alleges a claim for flaws in the books received, and pays less than the original invoice. The short payments from these customer’s is not being credited to the original invoices. The payments in fact are being credited to receivables from prior impaired transactions. The CFO of the company has told the A/R department to effectively treat all invoices as collectible and “to apply payments to carried-over balances. The CFO has stated that the customer’s claims lack basis. The CFO receives a bonus based upon the profitability of the company. Willie has approached the CFO and told him that the application of payments in accounts receivable are misguided and must change. The CFO has stated that “he can’t do that (make any changes)”. In addition the CFO has made a veiled threat to Willie, stating “who
Who Signs Your Check Group Project
Group 5
Marc Friedman
Jefferson Kinnay
Vincent Mayer
Tesleem Subair – No posts yet??
Kent Williams
ACCT 635 9040
Accounting Ethics
Professor Larry Wolod
February 19, 2015
Contents
Facts 2
Procedural History 2
Issue 2
Rule 2-3
Application / Analysis 3-4
Conclusion 4
Bibliography 5
Work Accomplished…………………………………………………………………………………………………………………………………6
Facts
Willie Lowman is the internal auditor for Dead Salesman Printing who is currently in the process of auditing the company’s account receivables. He finds that the company is constantly crediting and debiting accounts receivable. The accounts receivable clerk who is a CPA has been entering debits and credits on the A/R account on a regular basis, and at this stage they don’t know how many credits are valid or to what extent they are valid. Willie has also found that the A/R department is significantly understaffed which means that they do not have the staff and/or resources to verify the extent and validity of customer claims. Willie has found many instances especially in large accounts where the customer alleges a claim for flaws in the books received, and pays less than the original invoice. The short payments from these customer’s is not being credited to the original invoices. The payments in fact are being credited to receivables from prior impaired transactions. The CFO of the company has told the A/R department to effectively treat all invoices as collectible and “to apply payments to carried-over balances. The CFO has stated that the customer’s claims lack basis. The CFO receives a bonus based upon the profitability of the company. Willie has approached the CFO and told him that the application of payments in accounts receivable are misguided and must change. The CFO has stated that “he can’t do that (make any changes)”. In addition the CFO has made a veiled threat to Willie, stating “who
References: Bloom, R. & Kamm, J. (2014). Revenue Recognition, How we got here and where it will take us. Financial Executive (3). 48. Retrieved from: http://www.financialexecutives.org FASB, (Financial Accounting Standards Board). (n.d.) Accounting Standards Codification (ASC). Retrieved February 2015, from FASB Accounting Standards Codification database. Kieso, D.E., Warfield, T.D., & Wegandt, J.J. (2010). Intermediate Accounting. Hoboken, New Jersey: John Wiley & Sons, Inc. Work Accomplished Marc Friedman – Presented initial case review and analysis. Wrote up and edited the final case report using the collated work of all group members that submitted information and write-ups to the discussion board. Researched scholarly works and FASB rules for use in addressing the issues, and rules. Restructured and re-wrote analysis and conclusion. Kent Williams - Presented initial case review and analysis. Created a track change document based off first draft of final project and made edits. Reviewed final case updated Table of Contacts with correct Page numbers.