There's a school of thought that suggests, some might say a little naively, spot a conspiracy and you're just as likely to unearth a cock-up.
Could it therefore be, as CFO magazine this week argues, that accounting irregularities are often be less to do with fraud than with the all too human failing of bewilderment with the rules?
On February 28, the day investors expected NCO Group Inc. to release earnings results for fourth-quarter 2004, the provider of business-process outsourcing services instead issued some bad news: it was delaying the release of its financials and changing one of its revenue-recognition policies.
In January, the Horsham, Pa., firm received word that the Securities and Exchange Commission was taking issue with its policy.
NCO is not alone. The SEC has brought more enforcement actions related to revenue recognition than to any other area.
In most cases, the actions have less to do with fraud than with confusion about the existing patchwork of regulations.
According to a study released last summer, 76 percent of senior finance executives say there is a need for a comprehensive statement on how revenue should be recognized.
"There has never been a comprehensive assessment," says Edward Nusbaum, CEO of Grant Thornton LLP and a member of the Financial Accounting Standards Board's advisory council. "There has been piecemeal guidance put together by industry."