auditing class paper
Other
There are three questions: The original document is attached
Learning Objectives: Learn how to determine the accuracy your client’s revenue recognition practices by applying your understanding of the FASB rules. Identify fraud risks and apply audit procedures that will help you to gain evidence about whether fraud has occurred and/or whether or not the organization has sound internal controls in place to deter fraud.
#1: Identify at least 1 revenue recognition issue from the advertising source of revenue and 1 from the hosting revenue. Applicable guidance can be found in ASC 606 revenue recognition (make sure to use the new guidance in 606!) and ASC 985-605 software revenue recognition (for the hosting revenue). When answering this question, be sure to explain how the revenue should be recognized and offer your opinion based on your accounting research.
#2: Using guidance from auditing standards AS2110, identify at least 1 fraud risk from the advertising source of revenue and 1 from the hosting revenue (in your own words).
#3: Still referring to AS2110, identify at least 2 potential audit procedures for the advertising source of revenue and 2 for the hosting revenue that would address the fraud risks you identified in #2 (in your own words). Make sure your recommended audit procedures are specific to this case, for instance if you use “inquiry”, you must provide detail about what and whom the auditors are inquiring with related to the fraud risk you identified. 1
