Revenue recognition at TSA

Requirement 1:

Consider the following excerpt:

"(A) recent survey of financial executives noted that the revenue

recognition process is increasingly more complex to manage, more

prone to error, and more material to financial statements compared to

any other area in financial reporting. The report went on to note that

revenue recognition is a top fraud risk and that regardless of the

accounting rules followed (GAAP or IFRS), the risk of errors and

inaccuracies in revenue reporting is significant."

Kieso, Weygandt and Warfield, Intermediate Accounting, 15th edition,

pg. 1042.

From the TSA case, provide one example each of the assertion that the revenue

recognition process is (a) complex to manage, (b) prone to error, (c) material to financial

statements, and (d) a top fraud risk.