Earlier this year, the International Accounting Standards Board (IASB) and the U.S. Financial Accounting Standards Board (FASB) jointly issued new requirements for recognizing revenue under IFRS and US GAAP. The revised standard will become effective on January 1, 2017. As the proposed standard worked its way through due process, stakeholder feedback was solicited. Feedback to the standard was documented in the discussion paper Preliminary Views on Revenue Recognition in Contracts with Customers. Several concerns were documented as some respondents felt there would be problems applying one revenue-recognition rule across all industries. In particular, it was felt that there would be issues with construction and telecommunication companies. 

Required 

(a) Choose one of the industries mentioned by the respondents to the IASB/FASB discussion paper as requiring special rules for revenue recognition. Summarize the respondents’ concerns and explain how revenue is currently recognized and measured in that industry. 

(b) For the industry you have chosen, explain the auditing implications of the (1) current and (2) new revenue-recognition rules to become effective January 1, 2017. Would the auditor’s job be easier or harder under the new standard?