Explorer

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 firm's internal inspection program inspected this audit and reviewed these areas but did not identify the deficiencies below. The firm sent positive confirmation requests to certain customers. The following deficiencies were identified: · The firm did not perform alternative procedures for certain positive confirmation requests for which it did not receive a response. (AS 2310.31) Unrelated to our review the issuer reevaluated its accounting for accounts receivable and concluded that a material misstatement existed that had not been previously identified. The issuer subsequently corrected this misstatement in a restatement of its financial statements and the firm revised and reissued its report on the financial statements.

The firm's internal inspection program inspected this audit and reviewed these areas but did not identify the deficiencies below. The firm sent positive confirmation requests to certain customers. The following deficiencies were identified: · For certain confirmations that were returned with exceptions the firm did not evaluate the nature of those exceptions. Further for certain other confirmations that were returned with exceptions the firm did not perform alternative procedures that provided sufficient appropriate audit evidence that recorded amounts of accounts receivable existed and were accurate at the confirmation date. (AS 2310.33) Unrelated to our review the issuer reevaluated its accounting for accounts receivable and concluded that a material misstatement existed that had not been previously identified. The issuer subsequently corrected this misstatement in a restatement of its financial statements and the firm revised and reissued its report on the financial statements.

Payments collected by the issuer were applied to the oldest outstanding accounts receivable balance first. The firm used a system-generated accounts receivable aging report to substantively test the allowance for doubtful accounts but did not perform procedures to test or test any controls over the accuracy of the report beyond agreeing a sample of balances from the accounts receivable aging report to the respective billings. (AS 1105.10)

To substantively test accounts receivable the firm sent confirmation requests for a selection of accounts receivable that met certain criteria. The firm did not perform any procedures to test the remaining population of accounts receivable. (AS 1105.27)

To test accounts receivable the firm sent confirmation requests either by mail or electronic mail to a selection of the issuer's customers that met certain criteria. The following deficiencies were identified: • The firm received electronic responses to certain of its 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)

To test accounts receivable the firm sent confirmation requests either by mail or electronic mail to a selection of the issuer's customers that met certain criteria. The following deficiencies were identified: • The firm did not perform alternative procedures for positive confirmation requests for which it did not receive a response. (AS 2310.31)

To test accounts receivable the firm sent confirmation requests either by mail or electronic mail to a selection of the issuer's customers that met certain criteria. The following deficiencies were identified: • The firm did not evaluate the nature of exceptions in returned confirmations. (AS 2310.33)

To test accounts receivable the firm sent confirmation requests either by mail or electronic mail to a selection of the issuer's customers that met certain criteria. The following deficiencies were identified: • The firm did not perform any procedures to test the remaining population of accounts receivable that was not included in the confirmation selections. (AS 1105.27)

The firm's approach for substantively testing the allowance for doubtful accounts was to review and test management's process. The firm did not sufficiently evaluate the reasonableness of the allowance because the firm did not perform procedures to test the assumptions the issuer used to determine the allowance. (AS 2501.09 .10 and .11)

The firm's approach for substantively testing the allowance for doubtful accounts was to review and test management's process. The firm did not test the accuracy and completeness of data the issuer used to determine the allowance. (AS 1105.10; AS 2501.11)

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 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 firm's approach for substantively testing the allowance for doubtful accounts was to review and test management's process. The firm did not sufficiently evaluate the reasonableness of the allowance because it limited its procedures to (1) inquiry of management and (2) obtaining documents from the issuer related to promises from its customers to pay the amounts owed without evaluating the authenticity and reliability of those documents. (AS 2501.09 .10 and .11)

The firm did not perform any substantive procedures to test the existence of accounts receivable. (AS 2301.08)

The firm did not perform any substantive procedures to test the valuation of accounts receivable. (AS 2501.07)

The firm selected an account receivable for testing but did not perform substantive procedures to test it beyond comparing it to invoices. (AS 2301.08)

The firm selected an account receivable for testing but did not perform any substantive procedures to test whether the account receivable was fully collectible. (AS 2501.07)

The firm did not perform sufficient substantive procedures to test the existence of accounts receivable because for certain receivables selected for testing the firm limited its procedures to comparing the customer's name date and amount of the receivable to the corresponding tax invoice which was based on sales data provided by the component. (AS 2301.08)

The firm did not request the confirmation of accounts receivable or document how it overcame the presumption to perform confirmation procedures. (AS 2310.34 and .35)

The firm sent positive confirmation requests to the issuer's customers for a sample of accounts receivable. For certain items in its sample the responses were returned by email. The firm did not consider performing procedures to verify the source of these responses. (AS 2310.29)

The issuer initiated and processed sales at numerous business units. The firm designated certain of the issuer's business units as (1) subject to more extensive audit procedures or (2) subject to less extensive audit procedures. With respect to business units subject to more extensive audit procedures the following deficiencies were identified: · The firm did not identify and test any controls that addressed the existence of accounts receivable. (AS 2201.39)

The issuer initiated and processed sales at numerous business units. The firm designated certain of the issuer's business units as (1) subject to more extensive audit procedures or (2) subject to less extensive audit procedures. With respect to business units subject to more extensive audit procedures the following deficiencies were identified: · The firm sent positive confirmation requests to the issuer's customers for a sample of accounts receivable. For certain items in its sample the responses were returned by email. The firm did not consider performing procedures to verify the source of these responses. (AS 2310.29)

The issuer initiated and processed sales at numerous business units. The firm designated certain of the issuer's business units as (1) subject to more extensive audit procedures or (2) subject to less extensive audit procedures. With respect to business units subject to less extensive audit procedures the following deficiencies were identified: · In determining the extent to which audit procedures should be performed at these business units the firm did not evaluate whether (1) specific risks of material misstatement existed at these business units and (2) the risks of material misstatement the firm identified for the business units subject to more extensive audit procedures also applied to these business units such that in combination these risks presented a reasonable possibility of material misstatement. (AS 2101.11 and .12; AS 2201.B10)

The issuer initiated and processed sales at numerous business units. The firm designated certain of the issuer's business units as (1) subject to more extensive audit procedures or (2) subject to less extensive audit procedures. With respect to business units subject to less extensive audit procedures the following deficiencies were identified: · The relevant controls the firm selected for testing were two entity level controls that included monthly reviews of financial information including accounts receivable for these business units. The firm did not evaluate the review procedures that the control owners performed including the procedures to identify items for follow up and/or the procedures to determine whether those items were appropriately resolved. (AS 2201.42 and .44)

The issuer initiated and processed sales at numerous business units. The firm designated certain of the issuer's business units as (1) subject to more extensive audit procedures or (2) subject to less extensive audit procedures. With respect to business units subject to less extensive audit procedures the following deficiencies were identified: · The firm did not perform any substantive procedures to address the risks of material misstatement related to existence of accounts receivable. (AS 2301.08)

The firm sent positive confirmation requests to the issuer's customers for a sample of accounts receivable. The following deficiencies were identified: · For certain items in its sample the responses were returned by email. The firm did not consider performing any procedures to verify the source of these responses. (AS 2310.29)

The firm sent positive confirmation requests to the issuer's customers for a sample of accounts receivable. The following deficiencies were identified: · For certain confirmations that were not returned the firm did not perform alternative procedures that provided sufficient appropriate audit evidence that these balances represented valid receivables as of the confirmation date. (AS 2310.31)

The firm did not identify and test any controls over the accuracy of prices and quantities invoiced. (AS 2201.39)

The sample sizes the firm used in certain of its substantive procedures to test revenue and accounts receivable 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 due to the deficiency in the firm's control testing discussed above. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A)

The issuer used several IT systems to initiate process and/or record transactions related to one type of revenue and the related accounts receivable. In its testing of controls over these accounts the firm tested various IT-dependent manual controls that used data and reports generated or maintained by these IT systems. As a result of the deficiencies in the firm's testing of ITGCs the firm's testing of these IT-dependent manual controls was not sufficient. (AS 2201.46)

The firm identified significant deficiencies in ITGCs for two of the issuer's IT systems related to individuals having inappropriate access to these systems. The firm identified and tested various compensating controls that it believed would mitigate these deficiencies. In performing its testing of the identified compensating controls the firm did not identify that the control owners used data and reports in the performance of these controls that were produced by the systems that were subject to these ITGC deficiencies. (AS 2201.68)

For another IT system the firm did not identify and test any controls that addressed the risk that inappropriate changes could be made to the reports maintained in this system. (AS 2201.39)

As a result of the firm's control testing deficiencies the firm did not perform sufficient procedures to test or sufficiently test controls over the accuracy and completeness of certain system-generated data and reports it used in its substantive testing for this revenue and the related accounts receivable. (AS 1105.10)

The firm selected for testing a control over the issuer's review of the accounting treatment for one-time or unusual transactions. The firm did not evaluate the specific review procedures that the control owners performed to assess the appropriateness of the conclusions reached regarding the accounting treatment. (AS 2201.42 and .44)

For one type of revenue the firm selected for testing controls that consisted of the issuer's review of (1) invoices and revenue journal entries and (2) the related accounts receivable reconciliation. The firm did not identify and test any controls over the accuracy and completeness of certain reports that were used in the operation of these controls. (AS 2201.39)

The following deficiencies were identified for another type of revenue: · The firm did not identify and test any controls that addressed whether the performance obligation was satisfied before revenue was recognized. (AS 2201.39)

The following deficiencies were identified for another type of revenue: · The firm did not perform any substantive procedures to test (1) whether the performance obligation was satisfied before revenue was recognized and (2) the completeness of this revenue for the first three quarters of the year. (AS 2301.08)

The sample sizes the firm used in its substantive procedures to test certain revenue and accounts receivable 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 due to the deficiencies in the firm's control testing discussed above. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A)

For one business unit the issuer recognized several types of revenue. The following deficiencies were identified: · For one type of revenue the firm selected for testing various automated controls over the processing of certain orders through the issuer's IT systems. The firm's testing of each of these automated controls using a sample of only one instance of the control's operation was not sufficient because the firm did not test whether changes to configurations within these controls were subject to effective ITGCs over these IT systems. (AS 2201.46)

For one business unit the issuer recognized several types of revenue. The following deficiencies were identified: · For a second type of revenue the firm selected for testing a control that included the issuer's evaluation of whether delivery and installation were a single performance obligation. The firm did not test this aspect of the control. (AS 2201.42 and .44)

For one business unit the issuer recognized several types of revenue. The following deficiencies were identified: · For a second type of revenue the firm selected for testing a control that included the issuer's evaluation of whether delivery and installation were a single performance obligation. The firm did not identify and test any controls that addressed the risk that other performance obligations existed that would affect whether revenue was appropriately recognized. (AS 2201.39)

For one business unit the issuer recognized several types of revenue. The following deficiencies were identified: · For both types of revenue the firm did not identify and test any controls that addressed whether the quantities the issuer invoiced represented the quantities ordered by the customers. (AS 2201.39)

For another business unit the firm selected for testing a control over the transfer of data from the revenue system to the general ledger. The firm did not test the automated aspect of this control that addressed the completeness of the data transferred. (AS 2201.42 and .44)

The sample sizes the firm used in certain of its substantive procedures to test revenue and accounts receivable 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 due to the deficiencies in the firm's control testing discussed above. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A)

The issuer offered preferred pricing based on a customer's status. The following deficiencies were identified with respect to revenue from certain of these customers: · The firm selected for testing a control that consisted of the issuer's review of customer pricing changes subsequent to the execution renewal or amendment of a customer contract with preferential pricing. The number of changes selected for testing did not provide sufficient appropriate audit evidence given the frequency with which the control operated. (AS 2201.46)

The issuer offered preferred pricing based on a customer's status. The following deficiencies were identified with respect to revenue from certain of these customers: · The firm selected for testing controls that included the issuer's review of customers' status. The firm did not test the aspects of these controls that addressed the issuer's review of changes to existing customers' status. (AS 2201.42 and .44)

The issuer offered preferred pricing based on a customer's status. The following deficiencies were identified with respect to revenue from certain of these customers: · The firm did not identify and test any controls over the accuracy of product cost information the issuer used to determine the sales prices in accordance with certain customer contracts. (AS 2201.39)

The issuer offered preferred pricing based on a customer's status. The following deficiencies were identified with respect to revenue from certain of these customers: · The firm did not perform procedures to test or test controls over the accuracy and/or completeness of certain system-generated data or reports the firm used in its substantive testing of this revenue. (AS 1105.10)

For two business units the firm did not identify and test any controls over the accuracy and completeness of certain information used to record revenue. (AS 2201.39)