Whistle-Blower Claims Accounting Shenanigans at SuccessFactors: A Case Study

Running head: PROFESSIONAL ETHICAL PRACTICE
Professional Ethical Practice
Name of the Student
Name of the University
Author Note

1PROFESSIONAL ETHICAL PRACTICE
EXECUTIVE SUMMARY
This paper entitled ‘Whistle-Blower Claims Accounting Shenanigans at SuccessFactors’ is a
case study. This paper shows if anybody was hurt because of the alleged improper accounting.
This paper further shows that the management should encourage the reporting of non-GAAP
financial measures as it would be useful to investors. The report also offers some principles of
recommendation that the management team can implement in order to ensure that there is no
improper accounting of multilayer contracts.

2PROFESSIONAL ETHICAL PRACTICE
TABLE OF CONTENTS
Introduction......................................................................................................................................3
1. SuccessFactors.........................................................................................................................3
2. Encouragement the reporting of non GAAP financial measures.............................................5
3. Recommendations for reducing improper accounting of multiyear contracts.........................8
References and Bibliography.........................................................................................................11

3PROFESSIONAL ETHICAL PRACTICE
Introduction
This paper entitled ‘Whistle-Blower Claims Accounting Shenanigans at SuccessFactors’
is a case study. This paper will try to show if anybody was hurt because of the alleged improper
accounting. This paper will further try to show how the reporting of non-GAAP financial
measures should be reported to the management as that would be useful to investors. This paper
will also try to offer some recommendations and try to show the various measures that the
management team can implement to ensure that there is no improper accounting of multilayer
contracts.
1. SuccessFactors
SuccessFactors gives its subscribers software resources through the internet for a fee.
SuccessFactors was doing improper accounting and a salesperson of the company who turned
whistleblower, accused the company for misappropriating funds and for doing improper
accounting (Abdelmaboud, Jawawi, Ghani, Elsafi and Kitchenham 2015). The salesperson also
told the authorities that the employees at SuccessFactors were writing the contracts improperly in
order to make it seem that the company was growing extremely fast. The investors were
rewriting the existing contract thereby turning it to a new contract, even though the client was
not a new customer. SuccessFactors was withholding the backlog figures. When the agency
enquired as to why SuccessFactors was withholding the backlog figures, SuccessFactors told the
agency that it felt that the investors did not consider the backlog figures useful. When
SuccessFactors was bought by SAP, it took the help of a legal firm from outside to examine
these claims and found no merit to these claims (Agrawal and Cooper 2015).