Excello

In: Business and Management

Submitted By reasha1
Words 1411
Pages 6
Excello Telecommunications
October 4, 2014
ETH/376
Katherine Parks

Excello Telecommunications has been profitable for many years, but recently has been faced with increased competition for its products by overseas manufacturers. For the first time in the company, it appears that earnings estimates will not be met. Management is concerned about the effect on bonuses, stock options, and the share price of Excello stock. When Terry Reed, the CFO, learns of a transaction on December 20, 2010, that might solve the problem. On December 20, 2010, Excello sold $1.2 million of equipment to Data Equipment Systems. Typically, this type of transaction would be recorded as a sale on the date of shipment. However, the customer requested that Excello hold on to the product until January 11, 2011, because Data Equipment lacked the warehouse capacity to hold the product until then.
The firm must adhere to all the laws and other regulations as set. Among the regulations include Generally Accepted Accounting Principles (GAAP), Sarbanes-Oxley Act of 2002 (SOX), and AICPA code of conduct. The rules impact the mechanism, of financial reporting in the company and also help sin the actions of major principles of accounting. As a result of this, the accounting team must ensure they get the best method that will help in maximizing g the wealth of the shareholders. Albeit the earnings estimates could be gotten through the adoption of illegal treatment of accounting books, it would not be of more help to the firm as it would be more disastrous when the Wall Street detected it.
There are a number of rules that Excello must follow to comply with if it is to fall in line with accounting actions, especially when it comes to posting dealing as well as financial statements. Some of the regulations include the SOX act of 2002, the GAAP as well as the AICPA Code of Conduct. Excello’s…...

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