Revenue And Accounts Receviable

Perpetrators of improper revenue recognition schemes often attempt to  offer the defense that recognizing future periods’ revenue in the  current period is only a “timing” error. Discuss whether the fact the  over stated revenue will likely be earned in later periods reduces the  impact of the overstatement or reduces the responsibility of the  perpetrator to report revenue accurately in the current period. Why is  an “increase in accounts receivable as a percentage of sales” a signal  of improper revenue recognition?

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