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92% of Public Companies’ Revenue Processes at Risk for Compliance Failures and Restatements

92% of Public Companies’ Revenue Processes at Risk for Compliance Failures and Restatements

by Rick Turoczy on August 1, 2006

A recent survey of 685 senior financial executives from a broad range of companies, revealed that revenue recognition and reporting activities are not automated within Financial/ERP systems. As a result, 92% of public companies are forced to rely on spreadsheets to fill vital gaps in their revenue reporting processes—despite the fact that spreadsheets are prone to errors, lack audit capabilities, and resist internal controls. This, and other findings, is from a new report by www.RevenueRecognition.com and IDC, “Enterprise Systems and Revenue Recognition: The Missing Link”.

As a result, compliance managers should be addressing the issue of having spreadsheets in the revenue reporting process. Executives should be extremely cautious about the integrity of the numbers they are attesting to under Sarbanes-Oxley requirements. Investors have to be wary of the risks of restatement which can hurt stock prices.

92% of Public Companies’ Revenue Processes at Risk for Compliance Failures and Restatements

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