To be clear, if (and it's a big if, I know) it's just about applying accounting principles as to when revenue can/should be recognized, there is a lot of room to debate how the relevant factors apply. I am certain that with larger entities having less attention (eye balls inspecting the minutia) it is not uncommon for two accountants to come up with two different time lines on revenue recognition. Not making excuses for TEUM, the dumb asses should have taken the most conservative route ... . But there is no way, IMHO (and I am no expert to be clear), that these lawsuits have any impact on going concerns ... companies have insurance for such matters and given how complex the accounting principles are, there will be no problem in my view finding two sides to the story, and plenty of experts that will take both sides. Could be wrong, and I would never bet what you are not comfortable losing, but I very much doubt what's involved is a clear case of fraud.
Right now, in my view, it's a lot about about finding a new accountant that says, in my judgment, the line for revenue recognition (in view of factors 2, 3, and 4 of subpart to provision xx to the accepted accounting principles for pin heads created for public companies having contracts ... ) should be drawn about 15 microns to the left of center ... and if that is the case, what's going on may be a lot to do about nothing that has any real world impact on operations, or the value of the company.
If the contracts are real, then at some point the associated revenue comes in the door ... end of fucking story. Shifting where the line is drawn on revenue recognition changes nothing (an overstatement I know ... as they need money to run day to day operations). But looking at AR, there is no one that did not already know timing of collection of revenues was an issue ... ie., revenue collection could have a longer horizon ... so in that sense nothing has changed.
In the meantime, I for one will continue to flip ... average down ... great product, real customers, big contract backlog, and TEUM is in the hot area cloud ... .
This will be a ton of fun to see how this unfolds ...
WT