Explorer

The issuer used various service organizations to process certain revenue transactions and recorded the related revenue based on information provided by the service organizations. The firm obtained the service auditors' reports which specified necessary user controls that addressed the accuracy and completeness of this information. The firm used this information in its substantive testing of this revenue but did not test or test the user controls over the accuracy and completeness of this information. (AS 2601.14)

The firm received electronic responses to its accounts receivable confirmation requests. The firm did not consider performing procedures to address the risks associated with electronic responses such as verifying the source and contents of the confirmation responses. (AS 2310.29)

The issuer determined the fair value of a significant account using certain assumptions and data. The firm did not sufficiently evaluate the reasonableness of these assumptions because it did not evaluate information that was inconsistent with the assumptions. (AS 2502.26 .28 .31 and .36)

The issuer determined the fair value of a significant account using certain assumptions and data. The firm did not perform any substantive procedures to test or in the alternative test any controls over the accuracy of this data. (AS 2502.39)

The firm did not perform procedures beyond inquiry of the issuer and reviewing certain agreements to test an income statement account. (AS 2301.08)

The firm did not perform any procedures to identify and select journal entries and other adjustments for testing. (AS 2401.58)

The firm did not perform sufficient procedures to test certain liabilities because it did not test (1) whether the liabilities remained obligations at year end and if so (2) the amount of such liabilities. (AS 2301.08)

The firm did not perform any procedures to identify and select journal entries and other adjustments for testing. (AS 2401.58)

The firm did not identify or appropriately address a departure from GAAP related to the financial statement presentation and disclosures associated with certain transactions. (AS 2810.30 and .31)

The firm did not perform sufficient procedures to evaluate whether certain revenue was recognized in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers (“ASC Topic 606”) because it did not perform any procedures to evaluate whether revenue was recognized as the issuer's performance obligation was satisfied. (AS 2301.08 and .11)

In addition the firm did not identify and evaluate a departure from GAAP related to the issuer's omission of certain disclosures required by FASB ASC Topic 850 Related Party Disclosures. (AS 2410.17; AS 2810.30 and .31)

The firm's substantive procedures to test revenue included testing a sample of transactions. The sample sizes the firm used in certain of its substantive procedures were too small to provide sufficient appropriate audit evidence because these procedures were designed based on a level of control reliance that was not supported as the firm did not identify and test any controls over revenue. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A)

The firm did not perform sufficient procedures to evaluate whether certain revenue was recognized in conformity with ASC Topic 606 because it did not perform any procedures to test whether the revenue was recognized when the issuer's performance obligation was satisfied. (AS 2301.08 and .13)

The firm did not perform procedures to evaluate whether the amounts reflected in certain of the issuer's revenue disclosures were accurate and complete beyond performing non-substantive analytical procedures. (AS 2301.08)

The firm selected for testing journal entries and other adjustments meeting certain fraud criteria. The firm did not perform sufficient procedures to test the selected journal entries and other adjustments because it did not examine the underlying support for the entries and adjustments. (AS 2401.61)

The firm did not perform sufficient procedures to evaluate whether the issuer had properly identified accounted for and disclosed its related party transactions because the firm did not evaluate whether there were any transactions with certain related parties. (AS 2410.14)

The firm did not perform procedures to test the accuracy and completeness of amounts due from related parties beyond sending confirmation requests to certain related parties and inspecting evidence of partial repayment. (AS 2301.08 and .11; AS 2410.12)

The firm's substantive procedures to test inventory included testing a sample of inventory items. The sample sizes the firm used in certain of its substantive procedures were too small to provide sufficient appropriate audit evidence because these procedures were designed based on a level of control reliance that was not supported as the firm did not identify and test any controls over inventory. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A)

For certain other revenue the following deficiency was identified: · The firm did not perform sufficient procedures to test the transaction price because it did not evaluate whether the promised consideration included variable consideration. (AS 2301.08)

For certain other revenue the following deficiency was identified: · The firm's substantive procedures to test this revenue included testing a sample of transactions. The sample size the firm used was too small to provide sufficient appropriate audit evidence because these procedures were designed based on a level of control reliance that was not supported as the firm did not identify and test any controls over the revenue. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A)

For certain other revenue the following deficiency was identified: · The firm's substantive procedures to test this revenue included testing a sample of transactions. The firm did not take into account appropriate factors in determining its sample size including its established tolerable misstatement for the population the allowable risk of incorrect acceptance and the characteristics of the population. (AS 2315.16 .23 and .23A)

The firm used an issuer-prepared report in its substantive procedures to test the inventory reserve but did not perform any procedures to test or test any controls over the accuracy and completeness of this report. (AS 1105.10)

The firm's substantive procedures to test the valuation of inventory included selecting a sample of inventory items for testing. The firm did not perform any procedures to identify slow-moving inventory for certain inventory items selected for testing. (AS 2301.08 and .11)

The firm's substantive procedures to test whether inventory was stated at the lower of cost or net realizable value included selecting a sample of inventory items for testing. The firm did not perform any procedures to test certain inventory items selected for testing. Further the firm did not perform procedures to test certain other inventory items selected for testing beyond comparing the reported cost of the inventory item to its selling price reflected in the issuer's price list. (AS 2301.08 and .11)

The firm selected for testing journal entries and other adjustments meeting certain fraud criteria. The firm did not perform sufficient procedures to test the selected journal entries and other adjustments because it did not examine the underlying support for the entries and adjustments. (AS 2401.61)

The firm did not perform sufficient procedures to evaluate whether the issuer had properly identified accounted for and disclosed its related party relationships and transactions because the firm did not take into account information gathered during the audit that could indicate that related party relationships or transactions previously undisclosed to the firm might exist. (AS 2410.14 .15 and .16)

The firm selected for testing certain controls that consisted of the issuer's review of the allowance for doubtful accounts. The firm did not evaluate whether the controls were designed and operating effectively to ensure the methodology and assumptions used by management to develop the allowance for doubtful accounts were in conformity with IFRS. (AS 2201.42 and .44)

The firm did not evaluate whether the allowance for doubtful accounts was developed in conformity with IFRS. (AS 2810.30)

The firm's internal inspection program inspected this audit and reviewed these areas but did not identify the deficiencies below. The issuer used certain data to recognize certain revenue. The firm did not identify and test controls over the accuracy and completeness of this data. (AS 2201.39)

The firm's internal inspection program inspected this audit and reviewed these areas but did not identify the deficiencies below. The issuer used certain data to recognize certain revenue. The firm used this data to substantively test certain revenue. The firm did not perform any procedures to test or identify and test controls over the accuracy and completeness of this data as discussed above. (AS 1105.10)

The firm's internal inspection program inspected this audit and reviewed these areas but did not identify the deficiencies below. The firm selected for testing a control that consisted of the issuer's review of bank reconciliations. The firm did not evaluate the review procedures that the control owner performed including the procedures to identify items for follow up and the procedures to determine whether those items were appropriately resolved. (AS 2201.42 and .44)

The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. The issuer reported digital assets. The following deficiency was identified: · The firm did not test the valuation of certain digital assets at year end. (AS 2501.07) Unrelated to our review the issuer reevaluated its accounting for certain digital assets and concluded that a material misstatement existed that had not been previously identified. The issuer did not file an amended Form 10-K or a Form 8-K indicating that its previously issued financial statements should not be relied on. Instead the issuer corrected this misstatement in a subsequent filing by revising the presentation and the firm revised and reissued its report on the financial statements.

The issuer engaged a valuation specialist to perform its annual goodwill impairment analyses. The firm did not perform any procedures to evaluate the relevance and reliability of external data and test the accuracy and completeness of issuer-prepared data that the company's specialist used to develop certain significant assumptions. (AS 1105.A8a)

The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. The issuer reported digital assets. The following deficiency was identified: · The firm did not evaluate the appropriateness of the issuer's presentation of digital assets. (AS 2301.08 and .13) Unrelated to our review the issuer reevaluated its accounting for certain digital assets and concluded that a material misstatement existed that had not been previously identified. The issuer did not file an amended Form 10-K or a Form 8-K indicating that its previously issued financial statements should not be relied on. Instead the issuer corrected this misstatement in a subsequent filing by revising the presentation and the firm revised and reissued its report on the financial statements.

The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. The issuer reported digital assets. The following deficiency was identified: · The firm did not evaluate the relevance and reliability of external data it used to test digital assets. (AS 1105.04 and .06) Unrelated to our review the issuer reevaluated its accounting for certain digital assets and concluded that a material misstatement existed that had not been previously identified. The issuer did not file an amended Form 10-K or a Form 8-K indicating that its previously issued financial statements should not be relied on. Instead the issuer corrected this misstatement in a subsequent filing by revising the presentation and the firm revised and reissued its report on the financial statements.

The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. The issuer reported digital assets. The following deficiency was identified: · The firm did not perform any procedures to establish that the issuer had control over the digital assets to support its rights and obligations. (AS 2301.08 and .13) Unrelated to our review the issuer reevaluated its accounting for certain digital assets and concluded that a material misstatement existed that had not been previously identified. The issuer did not file an amended Form 10-K or a Form 8-K indicating that its previously issued financial statements should not be relied on. Instead the issuer corrected this misstatement in a subsequent filing by revising the presentation and the firm revised and reissued its report on the financial statements.

The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. With respect to certain revenue the firm did not test whether (1) a contractual arrangement was entered into with the customer (2) the issuer satisfied its performance obligations prior to the recognition of revenue (3) the issuer had rights and obligations to the customer payments and (4) the rate charged to the customer was in accordance with the terms of the arrangement. (AS 2301.08 and .13)

The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. The firm did not evaluate the relevance and reliability of external data it used to test this revenue. (AS 1105.04 and .06)

The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. The firm did not perform procedures beyond obtaining a management representation letter to test other income including evaluating whether the issuer's accounting for the recognition of other income was in conformity with GAAP. (AS 2301.08)The firm did not perform procedures beyond obtaining a management representation letter to test other income including evaluating whether the issuer's accounting for the recognition of other income was in conformity with GAAP. (AS 2301.08)

The firm did not perform any procedures to test the fair value of certain significant accounts including consideration of contradictory information that was included in the work papers. (AS 2501.07; AS 2810.03)

The issuer engaged a valuation specialist to perform its annual goodwill impairment analyses. The firm did not perform any procedures to evaluate the reasonableness of certain significant assumptions used by the company's specialist. (AS 1105.A8b; AS 2501.16)

The issuer performed a qualitative assessment to determine whether any of its intangible assets were impaired and concluded that no relevant events or circumstances existed based on certain assumptions. The firm did not evaluate these assumptions. (AS 2501.07)

Certain inventory was held by an outside custodian. The firm did not perform sufficient procedures to test the existence of this inventory because it limited its procedures to testing certain purchases of this inventory during the year. (AS 2510.14)

During the year the issuer acquired a business and engaged a valuation specialist to determine the fair value of the acquired intangible assets. The firm's approach for substantively testing the fair value of acquired intangible assets was to test the issuer's process and the firm used an auditor-engaged specialist to evaluate the significant assumptions the company's specialist used. The firm did not sufficiently evaluate the reasonableness of the significant assumptions because it did not identify that the auditor-engaged specialist did not (1) perform procedures beyond inquiry of the company's specialist to evaluate the reasonableness of the significant assumptions that were developed by the issuer and the company's specialist and (2) evaluate the relevance and reliability of the external data that the company's specialist used to develop certain assumptions. (AS 1105.A8a and .A8b; AS 1210.09 and .12; AS 2501.16)

The firm did not identify and evaluate departures from GAAP related to the issuer's omission of certain disclosures related to revenue required by FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2810.30 and .31)

The firm did not evaluate the accuracy of the issuer's disclosure regarding the timing of when certain revenue was recognized including consideration of contrary evidence included in the firm's audit work papers. (AS 2301.08 and .13; AS 2810.03)

The firm did not evaluate whether a promised good related to this revenue was a separate performance obligation. (AS 2301.08 and .13)

The issuer engaged a specialist to develop an estimate. The firm did not test the accuracy and completeness of issuer-produced data that the company's specialist used to develop the estimate. (AS 1105.A8a)

The firm did not perform procedures to test another estimate beyond reconciling the amount to a confirmation. (AS 2501.07)

The firm did not perform any procedures to evaluate the relevance and/or reliability of data from various external sources that it used to test certain assets. (AS 1105.04 and .06)