Accounting Irregularities at Groupon - 1017 Words

Accounting Irregularities at Groupon Introduction In September 23 2011, Groupon (the Company), a rapidly growing online coupon merchant was forced by the SEC to file a restated S-1 registration statement. The reason for the restatement was that the SEC objected to the accounting methods that Groupon used in the calculation of its revenue, causing it to be overstated. According to Villanova University (2012), Groupon’s auditors at Ernst Young stated that Groupon was not setting aside sufficient funds to cover potential refunds to customers and this was allowed to persist due to â€Å"material weakness in the company’s internal controls†. Background When a customer purchases a coupon through Groupon’s website, the Company and the†¦show more content†¦Restated Income Statement Prior to Groupon’s IPO, the SEC forced the Company to restate the S-1 financials for 2008, 2009 and 2010 under GAAP. Gone was the ACSOI accounting metric that allowed it to inflate its revenue figures. The company also reported in its updated 10-K filing that it had started to use an improved refund model to better track and ensure that it maintains a reserve for anticipated refunds. The new more subdued figures can be seen below in Figure 2. Figure 2 Conclusion Having reported their earnings in the S-1 filing with less stratospheric revenue figures, investors were afforded the ability to approach the titan coupon merchant with a less gullible sense of enthusiasm and a more realistic sense of skittishness that should be warranted with an IPO sporting such inflated figures. As of this writing, the company does show good revenue growth but net income has been bumpy with consistent losses in the hundreds of millions. The new numbers show a company with an unproven business model and a justifiably meek stock price near an all time low of $3.83 for investors who might be looking for a lottery-ticket quality investment. In an age where corporations like Xerox and Enron have managed to scam investors with accounting irregularities, the fact that this questionable practice was discovered prior to the Company’s IPO makes this a story about how sometimes the system works. References Catanach, A. H. (2011).Show MoreRelatedEssay about Jet Task 1 Financial Analysis.8422 Words   |  34 Pagesto gain additional data. Trend percentages shall help us with indication of what direction Competitive Bikes are taking. b. Review the vertical analysis, analyze the results, and discuss operational areas of concern. As learned from Horngren, Accounting, 8th edition, we know that â€Å"vertical analysis is analysis of a financial statement that reveals the relationship of each statement item to a special base, which is 100% figure.†-1 We will be performing vertical analysis of income statement where

What Shoud You Do Free Essays

The strong will to deeply understand the field and build the business. Kaolin’s enthusiastic research on feta cheese before and during summer 2001 shows his firm will for success. He went on field and online to search any information about food imports. We will write a custom essay sample on What Shoud You Do or any similar topic only for you Order Now Furthermore, when he found himself struggling to maintain his pricing structure, he had a major breakthrough – his innovation. He established website Melancholia and started to promote credit sales. 2. Kaolin’s knowledge In finance and counting indeed helped him in rising and handling money. He explained his friends who had expressed interest and encouragement about his business and finally rose $40,000 as a capital. With a very limited source of capital, he made sure to keep up the money flow. Even until now, Melancholy could keep the price low while keep the quality up. 3. Khan’s belief and courage. With no savings and precious little knowledge of the import business, Kaolin was brave enough to refuse his Bulgarian winery contact when it is not beneficial for him. He then worked hard to raise the UAPITA – with some help from his friends, and stopped working at the restaurant. Even though the first container was a disappointment, he never gave up In overcoming any obstacles. His belief of success attracted other people who also believe in the same thing, and the success Just happened as simple as that. 1. The strong will to deeply understand the field and build the business. Kaolin’s enthusiastic research on feta cheese before and during summer 2001 shows his firm will for success. He went on field and online to search any information about food imports. Furthermore, when he found himself struggling to maintain his pricing structure, he had a major breakthrough – his Innovation. He established website Melancholy and started to promote credit sales. 2. Khan’s knowledge In finance and accounting indeed helped him in rising and handling money. He explained his friends who had expressed interest and encouragement about his business and finally rose $40,000 as a capital. With a very limited source of capital, he made sure to keep up the money flow. Even until now, Melancholy could keep the price low while keep the quality up. Khan’s belief and courage. With no savings and precious little knowledge of the import business, Kaolin was brave enough to refuse his Bulgarian winery contact when it is not beneficial for him. He then worked hard to raise the capital – with some help from his friends, and stopped working at the restaurant. Even though the first container was a disappointment, he never gave up in overcomi ng any obstacles. His belief of success attracted other people who also believe in the same thing, and the success Just happened as simple as that. 1. The strong will to deeply understand the field and build the business. Kaolin’s enthusiastic research on feta cheese before and during summer 2001 shows his firm will for success. He went on field and online to search any information about food imports. Furthermore, when he found himself struggling to maintain his pricing structure, he had a major breakthrough – his Innovation. He established website Melancholia and started to promote credit sales. 2. Khan’s knowledge In finance and accounting Indeed helped him In rising and handling money. He explained his friends who had expressed interest and encouragement about his business and finally rose $40,000 as a capital. With a very Melancholia could keep the price low while keep the quality up. 3. Kaolin’s belief and courage. With no savings and precious little knowledge of the import business, Kaolin was brave enough to refuse his Bulgarian winery contact when it is not beneficial for him. He then worked hard to raise the capital – with some help from his friends, and stopped working at the restaurant. Even though the first container was a spontaneity, he never gave up in overcoming any obstacles. His belief of success attracted other people who also believe in the same thing, and the success Just happened as simple as that. 1. The strong will to deeply understand the field and build the business. Kaolin’s enthusiastic research on feta cheese before and during summer 2001 shows his firm will for success. He went on field and online to search any information about food imports. Furthermore, when he found himself struggling to maintain his pricing structure, he had a major breakthrough – his innovation. He established website Melancholia and started to promote credit sales. . Kaolin’s knowledge in finance and accounting indeed helped him in rising and handling money. He explained his friends who had expressed interest and encouragement about his business and finally rose $40,000 as a capital. With a very limited source of capital, he made sure to keep up the money flow. Even until now, Melancholia could keep the price low while keep the quality up. 3. Kaolin ’s belief and courage. With no savings and precious little knowledge of the import business, Kaolin was brave enough o refuse his Bulgarian winery contact when it is not beneficial for him. He then worked hard to raise the capital – with some help from his friends, and stopped working at the restaurant. Even though the first container was a disappointment, he never gave up in overcoming any obstacles. His belief of success attracted other people who also believe in the same thing, and the success Just happened as simple as that. 1. The strong will to deeply understand the field and build the business. Kaolin’s enthusiastic research on feta cheese before and during summer 2001 shows is firm will for success. He went on field and online to search any information about food imports. Furthermore, when he found himself struggling to maintain his pricing Melancholia and started to promote credit sales. 2. Kaolin’s knowledge in finance and keep up the money flow. Even until now, Melancholia could keep the price low while keep the quality up. 3. Kaolin’s belief and courage. With no savings and precious little Even though the first container was a disappointment, he never gave up in believe in the same thing, and the success Just happened as simple as that. How to cite What Shoud You Do, Papers

Introduction to the Law of Contract (Clarendon)

Question: Discuss the extent to which, and the ways in which, the courts and parliament have eroded the concept of freedom of contract with reference to relevant case and statute law? Answer: Several rules have been created by the courts and also by the Parliament regarding the law of contract that has made an impact on the concept of the freedom of contract. Freedom of contract enjoyed by the parties is the liberty enjoyed by the parties to decide the terms of a contract without any type of interfering by the government (George Mitchell Ltd v Finney Lock Seeds). The notion of freedom of contractor also been significantly impacted by the recent legislation. For example the Unfair Contract Act has made a significant impact on the notion of freedom of contract. Section 12 of the legislation cannot be excluded from a contract. Likewise, the parties to a consumer contract cannot exclude the provisions mentioned in Sections 13 to 15. This legislation prescribes several requirements and in case these requirements are not fulfilled, a contract can be considered as unfair by the court and therefore not enforceable. In the same way, unfair terms in consumer contacts regulations, 1999 also imposed certain restrictions on the freedom of contract enjoyed by the parties in the past. Section 2(1), Unfair Contract Terms Regulations provide that the parties cannot include any term restricting the liability of a party in case of a death or personal injury suffered by the other party. Similarly, S 2(2) also says that the term that has been inserted in a contra ct with a view to restrict the responsibility of the party for a loss of property should be reasonable. Under these legislations, the terms of a contract have to pass the test of reasonableness. As a result, in case the court comes to the conclusion that any of the terms of the contract can be considered as unreasonable, such a term of the contract can be refused to be enforced by the court. For example, common law has prescribed several limitations on the amount of damages that can be contracted by the parties which are known as the restrictions on liquidated damages. In the same way, Common law also prescribes restrictions on the maximum length of the agreements regarding not to compete with the employer. It also needs to be noted that in particular during the last 60 years, a large number of rules have been promulgated by the legislative bodies that impose restrictions on the freedom of contract. There are several matters like labor and insurance regarding which it can be said that in a sense they have been removed from free-market. In the same way there are several other commercial activities that have been limited in scope by certain laws, like the antitrust laws. In the same way, another example of the restrictions imposed on the freedom of contract of the parties can be described in the form of a duty prescribed for the employees according to which, the employers cannot discriminate against their employees on the basis of gender, race or religion while making decisions relating to employment. There is an agreement among the researchers that the rules proposing restrictions on the freedom of contract can be justified if they have been promulgated with a view to protect the parties within the contract or with a view to protect the parties outside the contract. The common law duress includes duress to person, goods and economic duress. It is based on the will theory and the underlying principle can be described as the compulsion of the will of the victim due to which the consent of the victim is appreciated and in this way, also the freedom of contract of the victim. In Lawson v Supasink Ltd (1984) 3 TRL 37, deals with reasonable care and skill as provided by The Supply of Goods and Services Act 1982. In this case damages could be recovered because Supasink had not followed the plans. These rules limit the freedom of contract enjoyed by the parties. But these rules can be justified if the freedom of contract enjoyed by the parties will be harmful for the society due to reason that the parties or the parties that are outside the contract are not in a position to properly protect themselves. Sir George Jessel MR had strongly favored the freedom of contract enjoyed by the parties in the decision given in Printing and Numerical Registering Co v Sampson. However, it needs to be noted that the strict principles that have been mentioned in this case have been nearly abandoned during the 20th century as stated by Lord Denning in George Mitchell v Finney Lock Seeds. In this way, since the time of the judgment of Lord Jessel MR, there have been significant changes made in the principle of the freedom of contract enjoyed by the parties. Now it is considered that the capability of the courts to restrict the terms that can be considered as unfair, that has also been granted by the Parliament, allows for the adoption of more sensible principles that can be used for interpreting contracts. Now there is no requirement for the courts to change the sense of the words in order to arrive at the just result as the courts have the power to scrap the unfair terms of a contract on the basis of the unequal bargaining power is held by a party. In this way, the parties are not at the utmost liberty to include any terms in the contract regarding which they have agreed and therefore the notion of the freedom of contract has been significantly impacted by the Parliament and the courts. References Kessler, F. 1943, Contracts of Adhesion Some Thoughts About Freedom of Contract 43(5) Columbia Law Review 629 Atiyah, P.S. 2000, An Introduction to the Law of Contract (Clarendon) Collins, H. 2003, Contract Law in Context (4th edn CUP) Case Law Printing and Numerical Registering Co v Sampson (1875) 19 Eq 462 George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd [1982] EWCA Civ 5 Photo Production Ltd v Securicor Transport Ltd [1980] AC 827 Levison v Patent Steam Carpet Cleaning Co Ltd [1978] QB 69 Sze Hai Tong Bank Ltd v Rambler Cycle Co Ltd [1959] AC 576 Kessler, F. 1943, Contracts of Adhesion Some Thoughts About Freedom of Contract 43(5) Columbia Law Review 629 Collins, H. 2003, Contract Law in Context (4th edn CUP) Atiyah, P.S. 2000, An Introduction to the Law of Contract (Clarendon) Photo Production Ltd v Securicor Transport Ltd [1980] AC 827 Levison v Patent Steam Carpet Cleaning Co Ltd [1978] QB 69 Printing and Numerical Registering Co v Sampson (1875) 19 Eq 462 George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd [1982] EWCA Civ 5 Sze Hai Tong Bank Ltd v Rambler Cycle Co Ltd [1959] AC 576