Orange County Accounting Advisory Firm Leads in Implementing Revenue Recognition

Blythe Global Advisors Says Companies are Underestimating the Impact of the New Worldwide Revenue Recognition Standard on People and Processes.

Irvine, United States - May 7, 2018 /PressCable/ —

Blythe Global Advisors Says Companies are Underestimating the Impact of the New Worldwide Revenue Recognition Standard on People and Processes.

As a leading Orange County full service accounting advisory firm, Blythe Global Advisors continues to be in the forefront of helping companies implement the new revenue recognition rule. With its directive for a single worldwide standard for reporting revenue, the new rule represents one of the biggest accounting changes in years. It has turned accounting on its ear.

During its engagements helping early implementers of the new rule, Marc Blythe, president of Blythe Global Advisors, says that both clients and auditors are underestimating the amount of work and level of commitment a compliant implementation will require. Here are two of the scenarios Marc and his team have observed.

– Lower-level delegation of a strategic imperative

Many businesses are delegating responsibility for developing what is essentially a mission-critical imperative to earnest but less experienced staff. When revenue recognition experts arrive for initial meetings, the result is conversations that only scratch the surface of requirements. The new standard impacts systems, processes and culture. It affects results depending on companies’ legacy reporting procedures and the contractual framework within their respective industries. A comprehensive implementation needs to get down to the nuts, bolts and studs of the business and then needs to be followed up with a companywide plan to change and adapt every affected policy, procedure and process.

Put another way, successful implementation of the new rule needs to start with the right decision makers/change managers – the CFOs, controllers and senior accounting and finance managers who hold the following keys to successful implementation:

‒ The experience to understand the full scope of the new rule’s potential impact on strategy and business results.

‒ The knowledge to decide how the company will proceed – whether on a prospective, retrospective or modified basis.

‒ The portfolio to marshal the necessary resources.

‒ The power to make things happen quickly across business units, functions, etc.

– Failing to Anticipate the Impact on Internal Controls

Blythe Global Advisors is finding that even those companies that are making committed efforts to upgrade processes are getting caught short when it comes to the impact of the new rule on their previously best-of-breed internal controls. The requirements of the new rule increase the chances of internal controls deficiencies rising to a level of material weakness – which would require communication to shareholders.

In response, companies need to re-evaluate their internal controls for proper revenue recognition. Just as the bar for complying with all of today’s rules and regulations is constantly rising, companies should be ready for cascading changes once the new revenue recognition rule is fully implemented. When it comes to internal control processes and practices, best-of-breed with regular stress tests is mandatory.

As for the people who staff internal controls, both public and private companies need to employ highly skilled professionals. That means people with sufficient knowledge of accounting rules to recognize when new activities affect revenue recognition or to discern the tipping point when the business model has shifted significantly enough to warrant changes to accounting treatment.

Put another way, to ensure internal controls are compliant, companies need to develop an implementation plan that’s as deep and as it is broad – examining the impact of the new standard on the entire organization.

According to Marc, the impact of the new rule goes beyond accounting and financial functions into IT, sales, procurement, facilities, investor relations, human resources, etc. Development of upgraded, bulletproof practices and processes along with the enhanced skills necessary to deploy them is a steep curve. Successful implementation depends on a depth of professional knowledge and resources that even most larger companies don’t possess and that audit firms are restricted from providing. In short, companies will need outside help.

Marc’s first piece of advice is for companies to call a trusted accounting advisor who has a proven track record of helping clients resolve revenue recognition issues. If they’ve updated their practices under the new rule, they can most likely continue to help ensure compliance.

About Blythe Global Advisors

Blythe Global Advisors is an Irvine full service accounting advisory firm that helps companies of all sizes meet their reporting obligations by filling the gap in accounting and financial expertise. With extensive Big Four experience in all areas of accounting and financial reporting, Blythe Global Advisors offers a broad range of sophisticated, customized, affordable solutions and services to help companies prepare successfully for audits, upgrade the human and technical competency of their accounting and financial infrastructures, make investment decisions with confidence, and convey their companies’ true value to external and internal stakeholders. It ranks number 10 on OC Business Journal’s 2017 Management Consultants List.

About Marc Blythe

As president of Blythe Global Advisors, Marc Blythe brings more than 25 years’ experience advising companies of all sizes across all industries on their accounting and financial reporting requirements. Prior to forming Blythe Global Advisors, Marc was an audit partner at EY.

For more on Blythe Global Advisors, check them out at blytheglobal.com or contact them at 949-757-4180.

Contact Info:
Name: Marc Blythe
Organization: Blythe Global Advisors, LLC
Address: 19800 MacArthur Blvd., Suite 300, Irvine, CA 92612, United States
Phone: +1-949-757-4180

For more information, please visit http://www.blytheglobal.com

Source: PressCable

Release ID: 341618