Your client is Match Group (NASDAQ: MTCH), a recent (2015) IPO spin-off of Interactive
Corporation. The Company’s most recognizable brands are Match.com, OkCupid, and Tinder.
You are in the planning stages of the engagement to audit the financial statements as of and for
the year ended December 31, 2016, and your objective is to conduct a risk analysis of Match
Group for the purpose of identifying financial statement accounts for further investigation. To do
so, please respond to the following:
(1) What is Match Group’s strategy? In other words, how does Match make money?
(2) Briefly describe the most critical threat (strategic risk) to the sustainability of the dating
service business and Match’s strategy.
(3) Briefly describe one core business process at Match that reduces the potential impact of
the strategic risk you identified. Given this risk and Match’s response through its business
process, does Match’s strategy appear sustainable?
(4) For the core business process you identified above, briefly describe one process objective
and how that objective relates to Match’s overall strategy.
(5) Briefly describe one risk that threatens the achievement of the process objective above.
(6) Identify two internal controls at Match that address this process risk. Are these controls
designed effectively (to the best of your knowledge)?
