This is not correct. Most directors must rely upon outside advice to properly handle transactions. And many run afoul all the time, especially when the opportunity to enhance revenues or reduce expenses to boost quarterly numbers and hence, bonuses, gets in the way.livingontheedge wrote:...the accounting measurement and treatment to record in the books is handled directly by the Directors and the accountant simply keys in the Directors' instructions for recording the financial impact.
So........in terms of advisory on accounting treatment.........doesn't seem like the outsourced accountants do much.
Example: You are the director of a membership organization. You sell yearly $100 memberships. You sell three times as many in September as you usually do because of a special. How is this to be recorded?
You've just signed a large contract with a MNC to provide janitorial services to the company for three years. How is that recorded?
You are a professional consultant, earning the vast majority of your fees for professional services. As part of a deal, you also acquire and immediately turnover equipment to your client that is worth four times your consulting fees. How is that recorded?
You are a reseller of ISP services. You bill your clients monthly but your bill from the main ISP comes once every six months. How do you record the expenses?
You receive an invoice in your office on October 3, dated September 30, for services rendered in September. When do you record this expense?
You've just taken on a new employee with a wife and 5 kids. How do you record your repatriation liability for all of the EP's and DP's?
Again, even the simplest of businesses, unless it is selling soft drinks and roti prata on a cash basis, will have transactions that fall under GAAP.