One of the reasons for better revenue recognition standards is many companies use revenue recognition...
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Accounting
One of the reasons for better revenue recognition standards is many companies use revenue recognition to make their financial reports appear better than they are. Research by the Committee of Sponsoring Organization of the Treadway Commission (COSO) indicates that the most common form of fraud is a misstatement of revenue, with over 60% of companies studied committing some type of revenue fraud. Most of this fraud is committed in the computer hardware and software, and other manufacturing industries. (Olivia Pleasant Revenue Fraud and the Impact of New Revenue Recognition Standards https://libres.uncg.edu>uncg> O_Pleasant_Revenue_2018)
Required:- When revenue should be recognized in the software industry? What is the appropriate treatment, and how will revenue recognition vary? Discuss any two revenue recognition criteria in the case of software industries.
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