Role Of The Securities and Exchange Commission (“SEC”)

by | Aug 1, 2021 | Security

The Securities and Exchange Commission (“SEC”) reviews a company’s financial statements to ensure that they conform to U.S. GAAP before allowing the company to conduct an initial public offering and list on a major U.S. stock exchange. As part of its review, the SEC may write letters to the company to ask for justification for its particular accounting choices and policies. The company must write back with satisfactory explanations before it may conduct the initial public offering. In some cases, the company must change its accounting choices and policies to satisfy the SEC’s critique.

In June 2011, Groupon Inc. began the process of conducting an initial public offering by filing a form S-1 with the SEC. (The Form S-1 has the same sections as a 10-K, but in a different order and with some additional disclosure.) The SEC questioned the company’s revenue recognition policy in a series of correspondences. Ultimately, Groupon changed its revenue recognition policy and financial statements in response to these critiques.

In this paper, you will examine Groupon Inc.’s business, its revenue recognition policy, the SEC’s critique, and the change in Groupon Inc.’s revenue recognition policy. Address the following questions:Based on the Business description section (beginning on p. 68 of the S-1 dated June 2, 2011, Groupon S-1 2011-06-01.pdfActions ), describe what product Groupon sells and how the company makes money. Who are its customers? Who are its suppliers? What are the company’s competitive advantages, if any?
Even though the revenue recognition steps we covered in class and in the textbook were integrated in U.S. GAAP in 2016, imagine that these rules were in place in 2011. Based solely on the Business description, how would you apply these rules to recognize revenue for Groupon. Write an ideal revenue recognition policy for Groupon that incorporates the five steps.
Now look at the company’s revenue recognition policy in the financial statements, which begin on page F-1.
Describe how Groupon determined when and how much revenue recognize.
Explain how Groupon’s revenue recognition policy differs from the revenue recognition policy you proposed in answering question 2.
Now look at the SEC’s letter to Groupon, dated June 29, 2011, Groupon SEC letter 2011-06-29.pdfActions . See paragraphs 62 to 67 regarding Groupon’s revenue recognition policy.
What does the SEC question about Groupon’s revenue recognition policy?
What is the relevance of point 63 vis-à-vis point 62?
Finally, look at Groupon’s 10-K for 2011, Groupon 10-K 2011.pdfActions . This 10-K was issued after the company changed its revenue recognition policy, the SEC approved the new accounting policy, and the company conducted its initial public offering.
How does this new revenue recognition policy address the SEC’s critique?
How much did the company’s reported revenue change as compared to what was reported in the S-1?
Which means of accounting manipulation had Groupon used to inflate its revenue?
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Dante Alighieri played a critical role in the literature world through his poem Divine Comedy that was written in the 14th century. The poem contains Inferno, Purgatorio, and Paradiso. The Inferno is a description of the nine circles of torment that are found on the earth. It depicts the realms of the people that have gone against the spiritual values and who, instead, have chosen bestial appetite, violence, or fraud and malice. The nine circles of hell are limbo, lust, gluttony, greed and wrath. Others are heresy, violence, fraud, and treachery. The purpose of this paper is to examine the Dante’s Inferno in the perspective of its portrayal of God’s image and the justification of hell. 

In this epic poem, God is portrayed as a super being guilty of multiple weaknesses including being egotistic, unjust, and hypocritical. Dante, in this poem, depicts God as being more human than divine by challenging God’s omnipotence. Additionally, the manner in which Dante describes Hell is in full contradiction to the morals of God as written in the Bible. When god arranges Hell to flatter Himself, He commits egotism, a sin that is common among human beings (Cheney, 2016). The weakness is depicted in Limbo and on the Gate of Hell where, for instance, God sends those who do not worship Him to Hell. This implies that failure to worship Him is a sin.


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God is also depicted as lacking justice in His actions thus removing the godly image. The injustice is portrayed by the manner in which the sodomites and opportunists are treated. The opportunists are subjected to banner chasing in their lives after death followed by being stung by insects and maggots. They are known to having done neither good nor bad during their lifetimes and, therefore, justice could have demanded that they be granted a neutral punishment having lived a neutral life. The sodomites are also punished unfairly by God when Brunetto Lattini is condemned to hell despite being a good leader (Babor, T. F., McGovern, T., & Robaina, K. (2017). While he commited sodomy, God chooses to ignore all the other good deeds that Brunetto did.

Finally, God is also portrayed as being hypocritical in His actions, a sin that further diminishes His godliness and makes Him more human. A case in point is when God condemns the sin of egotism and goes ahead to commit it repeatedly. Proverbs 29:23 states that “arrogance will bring your downfall, but if you are humble, you will be respected.” When Slattery condemns Dante’s human state as being weak, doubtful, and limited, he is proving God’s hypocrisy because He is also human (Verdicchio, 2015). The actions of God in Hell as portrayed by Dante are inconsistent with the Biblical literature. Both Dante and God are prone to making mistakes, something common among human beings thus making God more human.

To wrap it up, Dante portrays God is more human since He commits the same sins that humans commit: egotism, hypocrisy, and injustice. Hell is justified as being a destination for victims of the mistakes committed by God. The Hell is presented as being a totally different place as compared to what is written about it in the Bible. As a result, reading through the text gives an image of God who is prone to the very mistakes common to humans thus ripping Him off His lofty status of divine and, instead, making Him a mere human. Whether or not Dante did it intentionally is subject to debate but one thing is clear in the poem: the misconstrued notion of God is revealed to future generations.

 

References

Babor, T. F., McGovern, T., & Robaina, K. (2017). Dante’s inferno: Seven deadly sins in scientific publishing and how to avoid them. Addiction Science: A Guide for the Perplexed, 267.

Cheney, L. D. G. (2016). Illustrations for Dante’s Inferno: A Comparative Study of Sandro Botticelli, Giovanni Stradano, and Federico Zuccaro. Cultural and Religious Studies, 4(8), 487.

Verdicchio, M. (2015). Irony and Desire in Dante’s” Inferno” 27. Italica, 285-297.

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