In if something were to happen. I was

In the summer of 2017, I had the opportunity to work at Dell Technologies at their American Headquarters in Round Rock, TX. I worked in their Global Assurance Transformation practice, which is basically internal audit with a fancy name. I specifically worked on the compliance team, I audited Travel and Expense reports to ensure compliance with the Dell Global Travel & Expense Policy.

I also had the opportunity to travel to Israel to conduct 3rd party audits on one of resellers, distributors, and marketing agencies. I reviewed supporting documentation of their inventory, such as invoices, purchase orders, proof of delivery (POD), and proof of payment (POP). I also helped with reviewing contingency plans if something were to happen.

Sometimes it is hard to do all the work on your own
Let us help you get a good grade on your paper. Get expert help in mere 10 minutes with:
  • Thesis Statement
  • Structure and Outline
  • Voice and Grammar
  • Conclusion
Get essay help
No paying upfront

I was always curious as to how an entity would report the contingency on their financial statements.As defined in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC), a contingency is an existing condition, situation, or set of circumstances involving uncertainty as to possible gain or loss to an entity that will ultimately be resolved when one or more future events occur or fail to occur. While interning at EY this past summer, I learn these risks or the uncertainty is known as WCGWs, What Could Go Wrong. The contingency plan for the technology industry will definitely be different from the contingency plan of the beverage industry.

While contingency plans may vary, they all were created to keep business operating efficiently if the worse should arise.Through my curiosity, I wondered how an organization would report the contingency. Are there any disclosures that need to be added to the financial statements? If the disclosures aren’t included, does it affect the presentation of the financial statements? Are they included on quarterly (interim) reports or just the annual reports? How long do the contingencies stay on the financial statements? ASC 450-10-60-1 discuss interim reporting for contingencies briefly, but ASC 270-10-50-6 goes more into depth about contingencies and other uncertainties that could be expected to affect the fairness of presentation of financial data at an interim date.

ASC 270-10-50-6 states “Contingencies and other uncertainties that could be expected to affect the fairness of presentation of financial data at an interim date shall be disclosed in interim reports in the same manner required for annual reports. Such disclosures shall be repeated in interim and annual reports until the contingencies have been removed, resolved, or have become immaterial. The significance of a contingency or uncertainty should be judged in relation to annual financial statements. Disclosures of such items shall include, but not be limited to, those matters that form the basis of a qualification of an independent auditor’s report.”ASC 270-10-50-6 answered all of my questions it talked about the disclosures needed, what reports the disclosures be on, when the contingencies should stop reporting the disclosures. It also tells how in-depth the disclosure should go into when talking about the contingency. I was able to find this specific codification reference because I knew a contingency was a liability. I searched under the liabilities tab, which listed all liabilities and contingencies was listed under 450.

I clicked on that tab and went to 10 (Overall) just to grasp an understanding of what could be under contingencies. While scrolling I went into relationships because the contingencies were made for both parties to stay operating efficiently. In the first paragraph, it generally talked about interim reporting on contingencies and to find a more specific explanation in ASC 270-10-50-6. I also could have gone directly to presentation, then interim reporting (270). I went to the Overall (10), and then Disclosures (50). Paragraph specifically spoke about contingencies and what should be included.After thorough research, I found the answers to all my questions.

I learned contingencies should be reported on interim reports and annual reports. They should be reported on all reports until the contingencies have been removed, resolved, or have become immaterial. It also involves a little bit of judgement when inquiring about the significance of the contingency. Disclosures should have all the necessary items needed to form an opinion by an independent auditor.


I'm Gerard!

Would you like to get a custom essay? How about receiving a customized one?

Check it out