That's why the SEC moved on this. It shouldn't take a savvy investor to try and catch phony accounting for a public company. They're selling on commission and counting the total sale as revenue, I'm not sure what kind of third rate accountant would suggest that unless tasked with pumping up the appearances of revenue.
A pretty good comparison industry is ticketing. A ticket distributor like TicketMaster sell tickets on commission but collects the cash and pays out to the business owners who were selling the ticket. Like Groupon, TicketMaster holds onto the cash for a while (easier to do refunds and what not if something happens to the event). Guess how TicketMaster books revenue? They only count their commission. The total value of tickets sold is reported, but called "Gross value of tickets sold" and never mentioned other than to be able to show how their commissions are doing.
That's why the SEC moved on this. It shouldn't take a savvy investor to try and catch phony accounting for a public company. They're selling on commission and counting the total sale as revenue, I'm not sure what kind of third rate accountant would suggest that unless tasked with pumping up the appearances of revenue.
A pretty good comparison industry is ticketing. A ticket distributor like TicketMaster sell tickets on commission but collects the cash and pays out to the business owners who were selling the ticket. Like Groupon, TicketMaster holds onto the cash for a while (easier to do refunds and what not if something happens to the event). Guess how TicketMaster books revenue? They only count their commission. The total value of tickets sold is reported, but called "Gross value of tickets sold" and never mentioned other than to be able to show how their commissions are doing.