In this entry I detail work performed as part of a major corporate merger. While I’ve shied away from showing financial data dimensions, it should become apparent how this informs the company’s ability to recognize income. I’ll describe the business scenario in its abstracted form, both to establish some useful boundaries and to shed light on the data forensics process. I’ll begin here with a top-down summary of the companies and their sub-entities, and then outline the first “stopping point” that shifted the focus of my working group.

Accidents and Essence in Data Forensics

companyabFor the purposes of my portfolio I use “publishing” and related terms to outline the industry and entities as they were described to me on that day. As it happens, the publishing lexicon happens to map very well to the actual product and distribution types of these companies. “Company A” is the largest publishing company of its type in the world. “Company B” is the fourth largest company in that industry. I was in the corporate offices of Company A, which was merging the data and applications of Company B into its systems. As with most multi-national corporations, they often gain their global presence through a series of mergers and acquisitions over many years. So even though I choose here to represent Company A as a monolithic “castle” and Company B as a group of individual houses grouped together, they are very similar from an organizational management perspective.

The data and systems fragmentation from those historical mergers and acquisitions influence each company’s financial management process, and eventually that “informed” the depth and breadth of work that was required to deal with the numerous issues which emerged as a result. At first blush, things seemed to have a sense of order. From the top down Company A had a consistent entity hierarchy. As a publishing conglomerate, it has large “summary” entities that I will refer to as “Publishing Groups”. Each of those Publishing Groups have a number of individual publishing companies associated – and those publishers are only associated with one “PubGroup”. The entity relationship is similar all the way down to the individual income-bearing product, the “Article”.

Due to Company A’s method of recognizing revenue, the original strategy was to derive all income at the Group Publisher level. And by their “Group Publisher” status Company B was to continue performing revenue splits as it had before the merger. This was a valid strategy, but the process of accounting for how those payments were made ran into several major technical hurdles. And those issues didn’t emerge until the high-level organization decisions had been “baked” into the formal merger plan.