Assess whether a referral to counsel is warranted (955eaf)

Situation

Round-trip cash circularization file arrived with an SEC comment letter on revenue for litigation-support partner. That is a Forensic Accounting Occupational Fraud decision on a referral to counsel is warranted in a pre-IPO SaaS company drafting an S-1.

Decision

Litigation-support partner in a pre-IPO SaaS company drafting an S-1 must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using round-trip cash circularization file after an SEC comment letter on revenue.

Hypotheses to test

• Authorize Remove access or reverse the item now; round-trip cash circularization file already has the discriminator after an SEC comment letter on revenue.
• Keep Temporary compensating control in force until round-trip cash circularization file is completed after an SEC comment letter on revenue for litigation-support partner.
• Treat round-trip cash circularization file as Approve a documented exception because both readings appear after an SEC comment letter on revenue.
• Refuse a Forensic Accounting close: litigation-support partner does not have the page a referral to counsel is warranted turns on in round-trip cash circularization file.

Analysis required

• Test cutoff, reversals, and system-of-record ties for materiality on a referral to counsel is warranted.
• Quantify the entry if litigation-support partner has to reverse it.
• Separate a close-process miss from a qualitative SAB 99 issue in a pre-IPO SaaS company drafting an S-1.
• For this Forensic Accounting Occupational Fraud file, read round-trip cash circularization file against an SEC comment letter on revenue and write the one fact that would move a referral to counsel is warranted for litigation-support partner.

Recommendation

Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Forensic Accounting / Occupational Fraud packet (round-trip cash circularization file after an SEC comment letter on revenue). Lead with the Forensic Accounting option round-trip cash circularization file can support after an SEC comment letter on revenue, then the two facts that force it, then the Monday action for litigation-support partner in a pre-IPO SaaS company drafting an S-1.