Many organizations have been criticized for improprieties in assigning costs to jobs. This practice has been prevalent in the defense contracting industry where companies have been caught overstating the cost of jobs for which they were being reimbursed. Major universities have misreported grant money and have overstated costs of research projects.
Required:
a) Discuss three actions that can result in incorrect job costing.
b) What actions can management take to ensure that proper accounting for jobs is taking place?

Question

Quizplus · Accepted Answer

The Answer of Many organizations have been criticized for improprieties in assigning costs to jobs. This practice has been prevalent in the defense contracting industry where companies have been caught overstating the cost of jobs for which they were being reimbursed. Major universities have misreported grant money and have overstated costs of research projects.
Required:
a) Discuss three actions that can result in incorrect job costing.
b) What actions can management take to ensure that proper accounting for jobs is taking place?

Many Organizations Have Been Criticized for Improprieties in Assigning Costs