Accounting help?

Question

You are the assistant controller for a public company. Wall Street stock analysts are projecting an earnings per share figure of $0.25 for your company. On December 29, a large customer returns a very large shipment of your goods that were defective. You tell the controller about the customer return and that the debit to sales return and allowances will have the effect of reducing earnings per share from $0.25 to $0.24. The controller indicates that failing to meet the consensus earnings expectations of the analyst community will result in a large stock price decline. The controller suggests waiting until January 2 (your company operates on a calendar year-end basis) to record the customer return. What should you do?

Answer 1

INTRODUCTION:

Reports plays major role in every company, which shows about the companies previous year performance. Recording the performance which is done inside the company is very essential. if any company Failing to record the report will face decline situation. Board Of Director of the Company is responsible for the record. By analyzing the company report will shows the performance of the company which is done in the previous year.

ACTION ON RECORDING REPORTS:

First of all you should try to convince the controller of the company about the issue that is to record the report of the company. here the situation is about sold goods were returned back to the company, but not recorded by the controller on the date of December 29. if the controller makes delay on recording the reports then it will affect the earning per share, which will go down from $0.25 to $0.24. so you can tell the controller about the decline issue. even though after conveying this situation to the controller if he/ she fails to take action on recording, then you can make complaint to the head officer of the controller who is responsible for the internal activities of the company and also major work of the head officer is to sign the internal control report.

But if the Head Officer fails to take action on December 29. then there will be a only one solution for this problem that is to arrange for a board meeting with committee members. here this step will gives you a perfect solution that is the audit committee member will oversees the report of the company on December 29. they will act as the responsible for the financial reporting of the company.so here I would like to conclude that you can convey this problem to the board of director on meeting then they will record the report on time that is on December 29 so you can easily avoid facing decline in earning per shares.