Practice Area: Complex accounting
Industry: In-flight entertainment and communications systems
Location: West Coast and worldwide
Client: Company
Role: Complex accounting related to revenue recognition and
Sarbanes-Oxley (SOX) compliance
Our client is $1.2 billion subsidiary of a large Japanese
electronics manufacturer and specializes in in-flight entertainment
and communications products. The subsidiary has its U.S.
headquarters in Southern California, a large operation in the
Seattle area, and other locations adjacent to the world’s leading
aircraft manufacturers. Boeing, Airbus, Lockheed, Bombardier and
Embraer are all significant customers of the company.
Turning Point was called in by an advisor to the company upon
learning the outside auditors were about to significantly reduce the
reported revenue for the year. The company had a complex set of
rules associated with its revenue recognition procedures, many of
which were not compliant with the strict requirements of SOX
reporting standards. There were a number of other significant SOX
concerns that had driven the auditors to take a very conservative
stance related to revenue recognition.
Our consultants were able to use their thorough understanding of
complex accounting issues and operational reporting to establish a
process for reporting earned revenue on a monthly basis. This
procedure was SOX compliant and addressed the concerns of the
auditors. From management’s perspective, the process accurately
presented the true revenue of the business and gave them the
operational controls that they required to effectively manage the
business.