I am not sure it's that straightforward, unless the drop in revenue is massive all at once. Even if it is, the manufacturer could still argue...
Yes and No. The crime is 'Channel Stuffing', not 'Stuffed Channel', and since evidence of the latter does not in and of itself prove the former, one has to prove management's intention to 'stuff', which may or may not be hard, depending on size of stuff, frequency of stuff, timing of stuff and a whole bunch of other 'stuffs'.
Although at the same time I think you are not recognizing how much simpler is to detect 'Stuffed Channel' in hindsight than in foresight. The reason should be clear: the whole point of the stuff is based on the inappropriate and substantial shifting of one periods items into the next period (and vice versa). So the 'stuff' HAS to be 'seen' on the P/L and the balance sheet, most likely in the next accounting period, (could be hidden a little longer in industies with extremely long sales cycles, 787s, quantum computers, etc.). You reap what you sow stuff. As in:
1. Sales Decrease
2. Returns Increase
3. Discounts Increase
4. A/R Decrease
5. Handling costs Increase
So there is quite a bit of 'stuff' to give it away in the post mortem, compared with almost nothing while it is occuring.
My question is: why do the Dirty Disties allow Stuffing Suppliers to Shamelessy Stuff, since it increases the Dirty Distys Dusty inventory at the same time the Dirty Disty is stuffing the Indifferent (Insolvent?) Integrators themselves? Maybe the Disties are less likely to be public?
but it can be ran to great success, moreso than if the company never stuffed.
Now this I have never heard before. I always thought of Stuffing as an organic, creeping process that just happens... e.g,
COO: Are we Stuffing yet? CFO: Let me run the numbers... No, we're fine. COO: How 'bout now? CFO: I'm waiting on those 'revised' sales numbers. COO: And now?? CFO: Get a lawyer!
But you make it sound like a go to market strategy or something. Whose 'great success', the shareholders at large or management? Surely the lack of confidence that results, from a couple of these incidents can't be better in the long run for anyone?