CPE Session 26: Sunday, August 3, 1:00 –
4:00 PM
Revenue Recognition and Audit Independence:
Getting Students to Think beyond the Rules
Description/Objectives:
The recent focus on the quality of earnings
has emphasized the importance of understanding
the revenue recognition concept. Two years after
the SEC issued SAB No. 101, there have still
been questionable interpretations as to when
income is recognized.
Enron has placed the issue
of independence in the forefront. While many
rules are being revised and the concept is more
clearly written for audits, the understanding
of independence has varied on nonaudit engagements.
A clear understanding of these
concepts is important for today’s student.
Textbook-standards-based emphasis has not been
enough. This session will focus on real-life
cases and interpretations that will foster critical
thinking in the application of authoritative
pronouncements to business situations.
The session will focus on a
critical look at the authoritative literature
and how it is currently being applied and misunderstood.
The relationship to SEC, GAO, SAS, and SSARS
applications of independence will be discussed.
Particular emphasis will be placed on the concept
of the appearance of independence and the natural
conflicts that occur.
The workshop will encourage
discussion among the participants on the application
of these concepts in various case studies. It
will focus on how different interpretations
of the concepts can lead to different conclusions.
The process of applying the concepts and understanding
conflicting interpretations will be emphasized,
along with how the conflicting pronouncements
have caused a cascading effect from regulated
audits to other attest engagements.
Format/Structure:
The workshop will combine lecture, discussion,
and case study. It will encourage participants’
comments during the entire session. Focus will
be on the application of the concepts of revenue
recognition and independence in various case
studies. The workshop also will focus on how
different interpretations of the concepts can
lead to different conclusions. The process of
applying the concepts and understanding conflicting
interpretations will be emphasized, along with
how the conflicting pronouncements have caused
a cascading effect from regulated audits to
other attest engagements.
Intended Audience:
- Instructors of Intermediate
Accounting, Auditing, Accounting Theory, and
other courses related to the accounting concepts
of revenue recognition and independence.
- Practitioners who perform.
Presenter:
Kenn Heaslip, Kean University |
