Case Analysis On Revenue Audit Of FX Company's Selling Virtual Goods Conducted By H Accounting Firm

In the tide of "Internet plus initiative",the global society,economy and culture are undergoing great changes.A variety of new media,such as WeChat,Weibo(which is micro-blog),Knowledge are like a hundred flowers in bloom.Especially the live platform experienced a swift growth in recent years.2016 is therefore named "live year" by the public.There are Live broadcast featuring online-games,sports,electronic business,finance,social contact nowadays.Various kinds of webcast platforms emerge in an endless stream,forming a complete industrial chain in a short time,and triggering a new era.Because the number of live broadcasting platforms is large and the competition is intense,managers may tend to whitewash financial statements by inflated income to win the favor of capital and gain opportunities for investment and financing.Nowadays,the profit mode of the live broadcast platform on the market is mainly about selling virtual goods,operating online-games with game manufacturers,operating advertising.The selling of virtual products is the primary income source of most live platforms.Since the selling of virtual goods is very different from that of general commodity,the traditional auditing methods cannot be perfectly applied.With the growth of these enterprises,how auditors effectively audit and provide reasonable assurance for the authenticity of these companies' financial statements also become a hot topic in the auditing circle.There are few researches related to revenue audit of virtual commodity both here and abroad.And most are theoretical studies.During my internship,I participated in the audit of virtual sales of FX live broadcast company.Therefore,I hope to provide useful references for CPA and accounting firms to deal with similar audit projects by studying this case.This paper uses the method of case study,taking H accounting firm auditing FX live broadcast's revenue of selling virtual goods as a case.Through the methods of studying theories and summarizing,the author analyses the feature of virtual goods selling and the challenge to the auditors.By analyzing the audit work conducted by H accounting firm,the author concludes the experience and inspiration.There are five parts in this paper.The first part includes the research background,research significance and summary of the structure of the paper,as well as the literature review on the audit of virtual merchandise sales revenue.The second part is an overview of the related theories of the audit of sales revenue from virtual goods.The sales revenue from virtual product has the following characteristics: transaction process has no real logistics transformation,transaction data are stored in electronic brain,transactions are settled with virtual currency.These features will bring some challenges to auditors: it is highly depended on IT audit,most audit clues are concealed and the traditional audit methods are not match.The third part is audit work to FX's revenue from selling virtual goods conducted by H accounting firm,including the basic facts of FX company,its revenue from selling virtual goods and H accounting firm.The forth part is the audit process implemented by H accounting firm,including the evaluation of the FX company's management risk,the initial assessment of the internal control system,the control test and the substantive test.The fifth part is the summary of the experience derived from audit work performed by H accounting firm.First,accounting firms should optimize audit resource allocation and set up excellent audit team.The advisable actions include maintaining audit independence and professional competency,selecting IT experts to participate in auditing and strengthening compound talents training.Second,auditors should pay close attention to the internal control of the audited units,maintain proper attention to internal control in the whole audit process,and conduct tests on special key control points.Third,auditors should choose targeted audit procedures,including creating account to track transactions,recalculating income amortization data and testing the fair value of virtual currency.