4.1) What is “Ticker Spam”?
A tactic by web-savvy publicists involves loading a news release up
with dozens, or even hundreds, of company ticker symbols to increase
the number of places online the release will be seen. For example
with MSFT or DELL in news release (even if the story has absolutely
nothing to do with Microsoft or Dell) millions of shareholders in these
two broad based stocks will be forced to see the news release.
This “ticker spamming” results in news release archiving on Yahoo!,
Bloomberg, AOL and online brokerage sites. It also makes investors
angry when they have to wade through headline after headline of
unrelated copy before finding the news that really matters to them.
4.2) What is a Controller?
A controller refers to a person within an organization that takes care of the
company’s financial accounts. The word controller originated from the
‘countreroller’ that refers to the person responsible for keeping ledger
accounts. The title controller is usually given to an individual who works in
a private organization. In today’s business terminology, controllers
are usually referred to as ‘finance controllers’ who basically
perform the same functions as a controller where they manage the
financial accounts of a business and ensure that the quality and accuracy
of financial reporting of the company are maintained up to standard.
4.3) What is a Comptroller?
Comptrollers perform very similar tasks to a controller.
A comptroller, however, may hold a higher ranking
position in the organization and holds a higher level
of responsibility. The title comptroller is usually given to an
individual who works in a government organization and holds similar
responsibilities to a controller. The work of a comptroller usually
starts once the financial accounts have been prepared and passed
over by the company’s accountant for review by the comptroller to
ensure accounts are prepared according to various accounting and
quality standards. They may also be responsible for overseeing
budgets and comparing how actual numbers are similar to or vary from
Controller vs Comptroller
As can be seen from the descriptions above, comptroller and
controllers perform very similar tasks in the organization and
almost the same to one another. The major difference lies in the
type of organization each one performs. A comptroller usually works
for a government organization, whereas a controller will usually
work in a private business. Further to this a comptroller is
perceived to be of higher ranking than a controller and is involved
in the internal costs and profits, whereas a controller will be more
involved in the costs and profits created at the final stage of the
What is the difference between Controller and Comptroller?
- The words ‘comptroller’ and ‘controller’ are closely related to
each other in the field of finance, and refer to finance personnel
who conduct activities similar to one another.
- A controller refers to a person within an organization that
takes care of the company’s financial accounts.
- Comptrollers perform very similar tasks to a controller. A
comptroller, however, may hold a higher ranking position in the
organization and holds a higher level of responsibility.
- The major difference lies in the type of organization each one
performs. A comptroller usually works for a government organization,
whereas a controller will usually work in a private business.
4.4) What is Channel Stuffing (legal)?
Channel stuffing is when a supplier encourages
a wholesaler or retailer to increase its inventory. One
technique is a temporary wholesale price discount that
creates an incentive for the retailer to forward
4.5) What is Channel Stuffing (illegal)?
Illegal channel stuffing is when a supplier encourages a wholesaler
or retailer to appear to increase its inventory. One technique is to
agree to simultaneously buy back the inventory at a price higher than
the price it was sold for as an incentive for the customer to play along.
4.6) What is Bill and Hold (legal)?
As described by the U.S. Defense Logistics Agency:
This method allows today’s cost-conscious customer to take advantage
of the savings of a non-depot shipment within the needed response
time. In clothing and textiles, the manufacturer produces the item,
is paid for his product, and then places it into DLA-owned
inventory. The vendor receives orders only for what is on hand at
his location, eliminating the guesswork often encountered under a
quick-response (QR) contracting technique. Orders are shipped from
the contractor’s depot directly to the customer. Contractor
locations operating under bill and hold are exempt from the depot
surcharge, which saves the customer money. Shipments from vendors
are under a four-day delivery requirement, which equals the current
depot delivery time.
4.7) What is Bill and Hold (possibly misleading)?
As described by the Journal of Accountancy:
One of the most common schemes is the bill-and-hold sales
transaction. While it’s not necessarily a GAAP violation, it’s often
associated with financial frauds and calls for deeper investigation.
The SEC says that all of the following conditions must be met for
revenue recognition to be appropriate:
- The risks of ownership must have passed to the buyer.
- The customer must have a commitment to
purchase, preferably in writing.
- The buyer must request the bill-and-sale
transaction and substantiate a business purpose for it.
- A fixed delivery date must exist.
- The seller must not retain any significant
specific performance obligations.
- The goods must be complete and ready for
shipment and not subject to being used to fill other orders.
4.8) What is Bill and Hold (illegal)?
GAAP requires that revenue recognition be based on whether the
revenue is realized or realizable and earned. Revenues commonly
are recognized at the time of sale, usually meaning delivery.
Because revenue recognition on bill-and-hold transactions departs
from this general practice, the auditor must know how and why a
company maintains that using this method is justified. In recent
enforcement actions, the SEC said a transaction must meet all
of the following conditions to justify revenue recognition:
The risks of ownership must have passed to the buyer.
- The company must have from the customer
a fixed commitment to purchase, preferably in writing.
- The buyer—not the seller—must have
requested the transaction and must have a substantial business
purpose for a bill-and-hold deal.
- There must be a fixed delivery date that
is reasonable and consistent with the buyer’s business purpose.
- The seller must not retain any significant specific performance
obligations, such as an obligation to assist in resale.
- The goods must be complete and ready for shipment and not
subject to being used to fill other orders.
- The exhibit, a confirmation request letter, is an example of how
the independent auditor can confirm whether a transaction
meets the revenue-recognition conditions.
The SEC has emphasized that the above is not a simple checklist.
A transaction might meet all the criteria and still fail the
revenue-recognition guidelines. The following factors also
must be considered:
- The date the seller expects payment and whether the seller has
modified its normal billing and credit terms for the buyer.
- The seller’s past experiences with bill-and-hold transactions.
- Whether the buyer has the expected risk of loss in the goods’ market value.
- Whether the seller’s custodial risks are insurable and insured.
- Whether Accounting Principles Board Opinion no. 21, Interest
on Receivables and Payables (on discounting the related receivable), applies.
- Whether the business reasons for the transaction have introduced a
contingency to the buyer’s commitment.
4.9) What is Shipped in Place?
Customers sometimes request that goods that are ready for delivery be
“shipped in place” due to their inability to accept delivery at that time.
In such a situation, the customer generally pays for the goods upon
shipment in place and the seller treats the goods as delivered.
Is revenue recognition appropriate in such cases?
Generally revenue recognition is not appropriate unless the customer
has taken title to the goods and assumed the risks and rewards of
In other words, shipment in place will be sufficient delivery for
revenue recognition purposes if it was done at the customer’s
request and the parties’ rights and obligations after shipment in
place are identical or similar to what the would be had actual
delivery been made.
4.10) What is Pretexting?
A controversial data-gathering technique. Pretexting is the act of
pretending to be someone who you are not by telling an untruth,
or creating deception. The practice of pretexting typically involves
tricking a telecom carrier into disclosing personal information of a
customer, with the scammer pretending to be that customer.
It’s illegal. The Gramm-Leach-Bliley Act outlaws unauthorized
attempts to gain personal nonpublic financial information. (Lawyers
disagree on whether the ban applies to phone records.) Phone
providers view pretexting as illegal and sue those who attempt it.
This is why many investigators say they’ve stopped the practice. A
bill in the California State Senate could make the offense a state
crime punishable by up to a year in jail.