Reference no: EM132887282

Problem - Quality Technology Systems (QTS) is a high-technology company that focuses on developing software that controls and manages industrial machinery used in automated manufacturing processes. As an accountant for QTS, one of your responsibilities is to determine which expenditures can be capitalized as software development costs. Because you are not an expert in software design, you rely extensively on status reports provided by the company's engineering department and have, over the years, developed a friendship with one of the engineers. Based on the latest status report, you have decided that a new wireless operating system had reached technological feasibility, which resulted in the capitalization of approximately $1,000,000 during the current quarter.

During lunch today, you mention to the engineer that you were impressed at the progress they had made on the wireless operating system. After making you promise that you would not repeat anything he says, the engineer responded that the project has really been time consuming, and he wasn't sure if it would ever result in a functioning technology. In fact, recent setbacks had resulted in much of the previous work being scrapped and the project effectively having to start over from scratch. He further confided in you that he overheard a conversation between the CEO and the chief engineer in which the CEO instructed the engineer to do whatever it takes to achieve technological feasibility by the end of the quarter. What are your responsibilities upon learning of these events?