Whether a referral to counsel is warranted from quarter-end revenue reversal

Situation

A controller resignation with no documented handoff put quarter-end revenue reversal cluster in front of restatement project controller in a construction contractor on percentage-of-completion. This Forensic Accounting / Revenue Integrity close is a referral to counsel is warranted from quarter-end revenue reversal cluster, and the live options are Remove access or reverse the item, Temporary compensating control, Approve a documented exception.

Decision

Restatement project controller in a construction contractor on percentage-of-completion must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using quarter-end revenue reversal cluster after a controller resignation with no documented handoff.

Hypotheses to test

• Quarter-end revenue reversal cluster reads as Remove access or reverse the item once a controller resignation with no documented handoff is lined up to the same Forensic Accounting population.
• Quarter-end revenue reversal cluster is closer to Temporary compensating control after a controller resignation with no documented handoff; Remove access or reverse the item would over-claim this Revenue Integrity extract.
• Approve a documented exception is still live in quarter-end revenue reversal cluster for restatement project controller in a construction contractor on percentage-of-completion.
• Quarter-end revenue reversal cluster is missing the fact restatement project controller needs after a controller resignation with no documented handoff; stop this Forensic Accounting close.

Analysis required

• Trace approval, SoD, and related-party links that quarter-end revenue reversal cluster actually shows.
• Test cutoff, reversals, and system-of-record ties for materiality on a referral to counsel is warranted.
• Quantify the entry if restatement project controller has to reverse it.
• For this Forensic Accounting Revenue Integrity file, read quarter-end revenue reversal cluster against a controller resignation with no documented handoff and write the one fact that would move a referral to counsel is warranted for restatement project controller.

Recommendation

Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Forensic Accounting / Revenue Integrity packet (quarter-end revenue reversal cluster after a controller resignation with no documented handoff). The follow-on Revenue Integrity action is what restatement project controller does next: implement the option, assign an owner, and log the missing fact.