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Class – what is cloud computing? What are the current accounting rules associated with cloud computing? Professor Bender Respond |

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| | | RE: Cloud computing | Andrii Kovalenko | 12/4/2013 3:31:02 PM |

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| Cloud computing - the practice of using a network of remote servers hosted on the Internet to store, manage, and process data, rather than a local server or a personal computer.

Despite the increasing use of clouds, accounting standard setters have opted not to release industry-specific guidance on accounting for costs associated with providing or using cloud arrangements. Therefore, entities must consult various Codification topics to determine the appropriate accounting treatment.

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For example:

The vendor that uses a data center must receive an AICPA Service Organization Controls Report (SOC), formerly known as a SAS 70 report. For purposes of this article, a vendor is considered the user, and the data center is the service organization. The AICPA developed the guidance to provide a highly specialized examination of a service organization’s internal control. There are three types of SOC reports: * AICPA SOC 1: Report on Controls at a Service Organization Relevant to User Entities’ Internal Control over Financial Reporting. * AICPA SOC 2: Report on Controls at a Service Organization Relevant to Security, Availability, Processing Integrity, Confidentiality and/or Privacy. * AICPA SOC 3: Trust Services Report (Trust Services Principles, Criteria, and Illustrations) (AICPA, Technical Practice Aids, vol. 1, (TPA sec. 100) commonly referred to as SysTrust reports). link

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| | | RE: Cloud computing | Joshua Ellenberg | 12/4/2013 9:46:16 PM |

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| Cloud computing is like doing business on the web. It eliminates the need for in-house technology infrastructure, such as servers and software, and has multiple benefits for business. Benefits include accessing information anywhere with an internet...