question:If Ultra is an SEC-registered company, what are some of the possible ramifications of this practice? (Hint: Look at SEC Release No. 45853, dated May 1, 2002, In the Matter of Michael A. Kolberg and Dale E. Huizenga, Respondent.)

Ultra Suppliers, Inc. (Ultra) supplies commercial building retailers with metal products, such as doors. Ultra's plant accountant, Dan Johnson, became responsible in January 20X1 for providing periodic sales data to general accounting and ensuring that this accounting data conformed to GAAP. Johnson knew that Ultra would include this data in its financial statements. Early in 20X1, Johnson offered a bill-and-hold arrangement to Ultra's largest customer, Sanex, and Sanex readily agreed to the arrangement. Johnson would recognize revenue when it sent an invoice to Sanex, which was prior to shipment (assume that any custodial services for holding the merchandise for Sanex is immaterial). Ultra also offered to nullify any sale made to Sanex if Sanex demonstrated that it could not make at least a 30-percent profit on the merchandise.

During 20X1, Johnson provided Ultra with monthly sales data that included this revenue from its bill-and-hold transactions. During the middle of 20X1, Johnson attended a continuing professional education seminar on revenue recognition. This seminar included a section that covered the proper recognition of revenue from bill-and-hold transactions. After returning from the seminar, Johnson spoke with the CFO of Ultra, Jeff Billings, about the recognition of revenue from the bill-and-hold arrangements, and Billings agreed that Johnson should continue accounting for the bill-and-hold transactions as he had in the past.

(Give the proper and complete answer with explanation)