Explorer

The issuer used multiple information-technology (IT) systems to initiate process and record transactions related to revenue accounts receivable and unbilled receivables. 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 following deficiency in the firm's testing of IT general controls (ITGCs) the firm's testing of these IT-dependent manual controls was not sufficient. • The firm selected for testing a control over logical access to several IT systems but did not test the aspect of this control related to these IT systems. (AS 2201.42 and .44)

For revenue accounts receivable and unbilled receivables the following additional deficiency was identified: · The firm selected for testing certain controls that consisted of the issuer's review of certain aspects of revenue accounts receivable and unbilled receivables. The firm did not perform procedures to evaluate the review procedures the control owners 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)

For revenue accounts receivable and unbilled receivables the following additional deficiency was identified: · The firm selected for testing a control over the review of the accuracy of invoices. The firm identified deviations in the operation of this control but did not determine the effect of these deviations on the operating effectiveness of this control. (AS 2201.48)

With respect to the firm's substantive procedures the following deficiency was identified: · The sample sizes that 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 (1) a level of control reliance that was not supported due to (a) the deficiencies in the firm's control testing discussed above and (b) the firm not obtaining evidence that a control over change management which it selected for testing was operating effectively during the entire period of reliance and (2) an assessment of risk for other substantive tests related to the same assertion that was not supported as the engagement team did not perform any other substantive procedures to test the same assertions. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A)

With respect to the firm's substantive procedures the following deficiency was identified: · The firm did not perform substantive procedures to test the allowance for doubtful accounts. (AS 2501.07)