ADM 3360 Lecture Notes - Lecture 2: Revenue Recognition, Nortel, Market Failure

• School: University of Ottawa
• Department: Administration
• Course: ADM 3360
• Professor: Audrey Giles

Document Summary

Initial fact situation: professional liability in relation to revenue recognition practices. Where outside legal counsel say that reliance should be placed on auditors: revenue recognition being a matter of professional judgement. Auditors said revenue in past had been inflated from. Could approach the auditors at present in relation to current practice. Seek the opinion of auditors prior to the next annual audit (compare to history of nortel and accruals on executive convicted of fraud) regular consultation with auditors a to accounting approaches. Enhanced value through their knowledge of the organization. Ability to contribute to the development and implementation of risk management programs. Skill in managing external professional services: practicing professionals, non-practising professions: purely management decisions, liable for negligence for their actions, be vicariously liable to others for their actions. If client is dissatisfied, most professional governing bodies have mechanisms for investigating complaints and helping to resolve disputes: responsibilities in tort, general responsibility.