Redesigning business process to comply with the new revenue recognition standard using process mining

Yunsen Wang, Tiffany Chiu, Victoria Chiu

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

This study proposes a framework and develops a prototype that redesigns revenue cycle business processes to comply with the new revenue recognition standard Revenue from Contracts with Customers (ASU No. 2014-09 FASB 2014). The new standard aims to report the nature, amount, timing, and uncertainty of revenue; however, the accounting literature and profession have raised concerns regarding companies’ compliance with the new standard, and urged companies to assess their practices and modify their accounting information systems accordingly. This study utilizes process mining to redesign a revenue cycle business process framework to consider single/multiple performance obligation(s), transaction price allocation, sales discounts granted/forfeited, and sales returns scenarios. In addition, a prototype is developed to detect non-standard sales transactions automatically and identify potential violations of the new standard. Findings in this study contribute to emerging technologies in accounting, internal auditing, and revenue recognition research, and are expected to be of interest to academics and practitioners.

Original languageEnglish
Pages (from-to)149-163
Number of pages15
JournalJournal of Emerging Technologies in Accounting
Volume17
Issue number1
DOIs
StatePublished - 2020

Keywords

  • Business process redesign
  • New revenue recognition framework
  • Process mining
  • Prototype

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