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Ethics and Ahead of the Accounting Curve

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Here is an interesting article on revenue recognition and how new pronouncements can affect the numbers.


The actions taken by Apple are consistent with revenue recognition rules, but are their financial results skewed? Do these new rules make financial reporting more transparent? Are any ethical challenges present?

Leone, M. 2010. Ahead of the accounting curve, too. CFO Magazine. March 25, 2010. Retrieved April 1, 2012 frm http://www.cfo.com/article.cfm/14485618/1/c_2984368

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The actions taken by Apple are consistent with revenue recognition rules, but are their financial results skewed?

Yes, the results are "skewed" by fast-forwarding revenue. Under the former rules, the sales from technology products were spread over the service period, on a subscription basis, because some services such as upgrades and new apps were not delivered at delivery of the hardware. Under the new rules, the revenue can be recognized proportionate to the value delivered, not over a time period. Rather than just applying the new rules going forward, Apple went backwards ...

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Discussion board questions

In some organizations, accountants act as "internal consultants"; they use their knowledge of the company's financial workings to advise the company on financial decisions.

What are the ethical considerations for accountants who serve as internal consultants? Do they differ from the ethical issues faces by accountants who do not act as internal consultants?

Question #1


Discussion Board

Deliverable Length: 4-6 paragraphs
Activity Based Costing in the Information Age

Activity based costing systems provide a much more accurate picture of product costs than do traditional product costing systems. This exercise focuses on an article presented on the Web site of the ACA Group, an alliance of highly trained and experienced consultants and instructors. The ACA Group provides in-house training, management consulting, and systems installation. You may recognize the names of some of the Group's clients including General Motors, Nissan Motor Company, Hughes Aircraft Company, Dole Packaged Foods, Gillette, Xerox, Gateway, and Anheiser Busch. The title of the article used for this exercise is entitled "Activity based Costing in the Information Age." (http://www.theacagroup.com/activitybasedcosting.htm). It was written by Jim Tarr, president of J.D. Tarr Associates. Mr. Tarr has over 25 years experience in consulting, senior management, and in industrial and manufacturing engineering. You have been asked by your manager to read the article and prepare a brief for other managers in the organization. The brief must answer the following questions.

1. What are some of the advantages and disadvantages of traditional product costing systems?

2. For what type of business case were traditional costing systems designed? Why isn't a traditional costing system appropriate for today's companies?

3. What is activity based costing? How does this system differ from traditional costing systems?

4. What are some of the benefits that can be derived from even a simple activity based cost model?

Question #2


Discussion Board

Deliverable Length: 6-8 paragraphs

The organization that you work for has been thinking about implementing one of the items below and they have asked you to prepare a summary of these topics. Using the Cybrary, the internet and other resources, research the following topics:

* Balanced Scorecard
* Economic Value Added

Using the Discussion Board, contrast and identify common themes among each of the

For extra points, who can give me 3 paragraphs on the discussion board for EVA and Balanced Scorecards? It has to be referenced and solid material.I want 5 sample compan

Question #3


Deliverable Length: 2-3 paragraphs

1. Managers should base pricing decisions on both cost and market factors. In addition, they must also consider legal issues. Describe the influence that the law has on pricing decisions.

2. "It is impossible to use DCF methods for evaluating investments in research and development. There are no cost savings to measure, and we don't even know what products might come out of our R&D activities." This is a quote from an R&D manager who was asked to justify investment in a major research project based on its expected net present value. How would you respond to this statement? Do you agree or disagree? Explain.

Question #4


Discussion Board

Deliverable Length: 3-4 paragraphs

You have been asked to speak about the topic of responsibility centers to a group of executives at a conference.
For this speech you should select a company/business that you are familiar with and briefly describe it. Give three examples of responsibility centers in that business. Describe how these responsibility centers interact.

Question #5

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