Case 2 2 golden bear inc

According to these schedules, Paragon recorded materially higher revenue and gross margin under the "earned value" method than it would have reported under the cost method for the same period, precisely the outcome that Sullivan cautioned the Company against.

For example, Paragon began a practice of failing to Case 2 2 golden bear inc for losses or reduced estimated gross margins resulting from operational problems on certain jobs. Paragon also artificially inflated its reported results by overstating the progress it made on its construction projects, enabling it to recognize revenue and gross margin earlier in the life of its contracts than otherwise appropriate under GAAP.

The two had too much control with regards to financial reporting and decision-making and worked to defraud Anderson and the public. The disclosure describes the justification and the effects that would accrue as a result of the change to enable users of the financial statements to have an in-depth analysis of the changes.

As result, even though the earned value method was based on physical progress and not cost, its auditor still expected Paragon to incur costs at relatively similar rates as with subjectively measured physical progress estimates.

The audit team was unable to document the reported estimated revenue amount in connection with eleven of the thirteen projects tested. In response, Sullivan relied excessively on oral representations from Paragon management as to the reason for unbilled balances on three projects and did not adequately test these, or any other unbilled receivable balances.

It is after switching to the earned value method that he was able to identify accelerated revenue recognition that was in material amounts. In fact, the adoption of the "earned value" Case 2 2 golden bear inc moved the Company from a net loss to a net income position in the second quarter of In this change, there can be more than one accounting principle that is generally accepted for a given situation.

By artificially increasing job costs, Paragon increased the percentage-of-completion estimates generated by the cost method and closed the gap between the revenue and gross margin estimates generated by the cost method and the "earned value" method.

Paragon changed the accounting method in use mid-year, in this case. Paragon management told Sullivan that most of these amounts related to unsigned change orders, but management could not produce any documents supporting these oral representations.

Question 3 In a high-risk engagement, the senior auditor should have a close supervision of the engagement team compared to the normal engagement. Office of the Chief Accountant to resume appearing or practicing before the Commission as: Paragon overstated its percentage-of-completion estimates on numerous projects at year-end and for the first quarter of Paragon had represented to the audit team, at the time it adopted the "earned value" method of estimating revenues, that it would apply the same methodology to calculate billings to customers as it applied to revenue recognition.

Thus, costs incurred no longer determined percentage-of-completion. As stated, after Paragon changed to the "earned value" method beginning in the second quarter ofParagon recorded materially higher revenues and profits under the "earned value" method than for the same periods under the cost method.

While procedures with respect to invoiced and paid costs were performed, Sullivan did not employ any procedures to determine whether the uninvoiced costs had actually been incurred as of year-end. The guides are meant to supplement the existing standards.

Beginning in the third quarter ofthis project manager provided to Paragon management, including Boyd and Curbello, a series of detailed Mansion Ridge forecasts, all of which projected material losses. Customer acceptance of such bills serves as a check, at least in part, on the accuracy of the revenue recognition process.Golden Bear Golf, Inc.

1. The assertions relevant to Paragon include the occurrence and accuracy of transactions, the valuation and allocation of account balances, and also the occurrence, classification and understandability and also accuracy and valuation of presentation and disclosure.

Case Summary Golden Bear International in. Case Golden Bear Golf, Inc. Jack Nicklaus, the "Golden Bear," endured public embarrassment and large financial losses when key subordinates misapplied the percentage-of-completion accounting. Case - Golden Bear Golf. Golden Bear Golf, Inc.

1. The assertions relevant to Paragon include the occurrence and accuracy of transactions, the valuation and allocation of account balances, and also the occurrence, classification and understandability and also accuracy and valuation of presentation and disclosure.

In OctoberSteve began serving as Chief Financial Officer of Golden Bear Golf (NASDAQ: Jack), with responsibility for improving the financial management and raising new capital for the struggling Golden Bear golf center division. Golden Bear Golf, Inc.

1. The assertions relevant to Paragon include the occurrence and accuracy of transactions, the valuation and allocation of account balances, and also the occurrence, classification and understandability and also accuracy and valuation of presentation and disclosure.

Case 2: Golden Bear Golf, Inc.

Case - Golden Bear Golf In: Business and Management Submitted By centerfield10cat Pages 3. Golden Bear Golf, Inc. 1.

The assertions relevant to Paragon include the occurrence and accuracy of transactions, the valuation and allocation of account balances, and also the occurrence, classification and understandability and .

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Case 2 2 golden bear inc
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