Discussion Post Read the article by McKenna (2012), Social Media's Phony Accounting, homework help

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Xnegre

Business Finance

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Read the article by McKenna (2012), Social Media's Phony Accounting (Links to an external site.)Links to an external site., and answer the following questions:

  • The author believes there are independence issues with the auditors in this case with Ernst and Young and various social media companies. Do you agree or disagree? Please provide facts from the article to support your position.
  • What revenue recognition options are available to Zynga?
  • Has technology changed the way revenue should be recognized?
  • As an auditor, would you agree with E&Y’s position on revenue recognition or should it be changed? Support your position with facts.

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Running Head: Social Media's Phony Accounting

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Social Media's Phony Accounting

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Social Media's Phony Accounting

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The author believes there are independence issues with the auditors in this case with
Ernst and Young and various social media companies. Do you agree or disagree?
Please provide facts from the article to support your position.
I disagree that there are independence issues with the Ernst and Young auditors
and other social media companies. In this article, Facebook and Zynga have a contract
with the Ernst and Young auditors. These auditors are specialists in virtual goods and
technology industry. This fact makes them unique and this is the reason they managed
to write three revenue recognition models in line with the Generally Accepted
Accounting Principles. Wit...

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