Making Connections - Case 14-6 Essay

5312 Words Feb 22nd, 2016 22 Pages
I. Making Connections Case #14-6
1. Succinct statement of the facts: Social Konnections Inc (SKI) is a global internet company that runs a large social media networking web site. The major source of income for the company is from the advertisers who use the advertising space created by Social Konnection Inc. The amount an advertiser pays depends on the number of views or the number of clicks depending on the type of the contract. The company acquired Corporate Collaborations this entity manages private and public social media networks that earn its revenue providing corporate social network development and hosting services. The audit committee of the company has requested the company to hire a new audit firm with a better experience in
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3. Alternative available to audit the issue or issues discussed in # 2 above indicating the authoritative basis.
PCAOB Auditing Standard No. 12 Paragraph 47:
"In applying analytical procedures as risk assessment procedures, the auditor should perform analytical procedures relating to revenue with the objective of identifying unusual or unexpected relationships involving revenue accounts that might indicate a material misstatement, including material misstatement due to fraud. Also, when the auditor has performed a review of interim financial information in accordance with AU sec. 722, he or she should take into account the analytical procedures applied in that review when designing and applying analytical procedures as risk assessment procedures."

605-10-S99 SEC Materials General Note: As more fully described in the Notice to Constituents, the Codification includes selected SEC and SEC Staff content for reference by public companies. The Codification does not replace or affect how the SEC or SEC Staff issues or updates SEC content. SEC Staff content does not constitute Commission-approved rules or interpretations of the SEC. |
General
605-10-s99-01Currently Viewing:
605 Revenue Recognition
10 Overall
S99 SEC Materials
General
> SEC Staff Guidance
>> Staff Accounting Bulletins
>>> SAB Topic 13, Revenue Recognition
S99-1 The following is the text

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