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Paper Topic:

Oracle Systems Corporation Case Answers

The present is to compensate sales force on the basis of sale thus mere signing is a great motivation . Thus , the new method would also require more efforts to deliver the service to customer in to quality as sale under the new method . To avoid the timing difference of delivery and contract signing , management would have to hasten delivery of service or goods after signing of contract

Answer to Question 6

Investors would normally downgrade the attractiveness of the stocks of Oracle because revenue recognition would be delayed . This is

on the premise that an earlier recognition of sales would normally increase revenues and profitability at the earliest possible time

However case facts say that stock prices have already fallen and this is with the assumptions that the investors have known the revenue method used by company . Therefore if the revenue method would be corrected by using the more conservative one , the investors may react possibly react positively since they would take the financial statements to be more reliable . Although it is feared that the bottom line could further be eroded , but at least the company is true to itself and to its investors . Credibility is important to investors since they would be entrusting their money to the managers . If these managers could not be trusted at the start to even comply with accounting standards , they could not be trusted to manage the corporation which will put into risk the invested money from investors

Answer to Question 7

I recommend that Oracle make the accounting change since the present international accounting standard on revenue recognition requires revenues should be made at the time of sale approximates the time of time of delivery that there should be matching of revenues with expenses . Case facts say that according to analyst opinions the...

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