Throughout the years, there have been many instances in which companies have had to restate previously issued financial statements after investigations by security regulators Usually, the restatements involve adjustments to reverse overstated assets or income About half of these overstatements invo...

The cash basis of revenue recognition would be more reliable since cash receipts are readil ...

Throughout the years, there have been many instances in which companies have had to restate previously issued

Question:

Throughout the years, there have been many instances in which companies have had to restate previously issued after investigations by security regulators. Usually, the restatements involve adjustments to reverse overstated assets or income. About half of these overstatements involve revenue recognition.
Required:
In light of this evidence, evaluate whether revenue recognition criteria should he changed to the cash basis.
Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...