Control Interno

J. of Acc. Ed. 29 (2011) 250–264

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J. of Acc. Ed.
journal homepage: www.elsevier.com/locate/jaccedu

Teaching and Education note

Onesource Corporate Consulting, Inc.: Tax and financial reporting considerations
Jane E. Baird ⇑, Mary S. Rolfes 1
Minnesota State University, Mankato, Department of Accounting and Business Law, College ofBusiness, 150 Morris Hall, Mankato, MN 56001, United States

a r t i c l e

i n f o

a b s t r a c t
This case places you in the role of a new staff accountant at a public accounting firm who is asked to research financial accounting and tax issues for a client engagement. The client, Onesource Corporate Consulting, Inc. is a large, rapidly growing and successful consulting firm that specializesin corporate restructuring work, forensic investigations, litigation consulting, strategic communications consulting, economic consulting, and technology development. You must research issues affecting the company’s financial statements and tax reporting, including: contingent debt, forgivable loans issued to employees, revenue recognition for various types of contracts, and lease incentives. Youwill likely find this case challenging. However, this case is based on a real company and the research and analysis required in this case is reflective of issues and assignments you may encounter early in your career. Ó 2012 Elsevier Ltd. All rights reserved.

Article history: Available online 6 July 2012 Keywords: Revenue recognition Convertible debt Employee loans Lease incentives

1. Casestudy Susan Smith sat at a desk staring at her computer, feeling overwhelmed. She really wants to do a good job for Mike Rainmaker, a manager in her office, but is not sure she is up to the task that he has assigned to her. Susan graduated from MidState University 3 months ago and went to work for a regional public accounting firm in its Baltimore, MD office. She has worked on a couple of clientengagements since completing the firm’s required training for new hires, doing basic new-hire tasks like auditing the client’s cash account. She made a great impression on Mike, and as a result, he has decided to be her mentor and has tried to schedule her on as many of his upcoming engagements
⇑ Corresponding author. Tel.: +1 507 389 2314.
1

E-mail addresses: Jane.baird@mnsu.edu (J.E. Baird),Mary.rolfes@mnsu.edu (M.S. Rolfes). Tel.: +1 507 389 2965.

0748-5751/$ - see front matter Ó 2012 Elsevier Ltd. All rights reserved. http://dx.doi.org/10.1016/j.jaccedu.2012.06.001

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as possible. Knowing his support could help get her on a fast track to promotion, she does not want to let him down. Mike has asked her to do someresearch for a new audit and tax client, and Susan doesn’t really know where to start. She didn’t have to do this kind of research in her college classes, but her firm’s training did teach her how to access the necessary resources through the firm’s network. ‘‘Well, I can’t stare at this computer forever,’’ Susan says to herself. ‘‘I’ll start with the Accounting Standards Codification and see what I canfind.’’ 1.1. Earlier that day Earlier that day, Mike stopped by her desk on his way in from a lunch meeting. Mike: ‘‘Great news! We just landed OCC as an audit and tax client!’’ Susan: ‘‘OCC?’’ Mike: ‘‘OneSource Corporate Consulting (OCC), Inc.—it’s one of the fastest growing companies in the country. We’ve been trying to land that contract for two years. We’ve just been hired to do both the auditand tax work for 2012. The bad news is that we are going to work some overtime to get the planning work done for the audit and to do some background work on some of the tax issues we’ll have to deal with when we do OCC’s returns. I’ll need you to do a lot of the initial ‘‘leg work’’ on this one.’’ Susan: ‘‘Sure! Where do you want me to start?’’ Mike: ‘‘Well, for starters, you’ll need to get...