Explorer

During the year the issuer acquired a business and engaged a specialist to assist in determining the fair values of certain acquired assets and the related liabilities as of the acquisition date using various significant assumptions. This specialist also assisted the issuer in determining the fair values at year end. The following deficiencies were identified: · In evaluating the company's specialist's methods to determine these fair values as of the acquisition date the firm selected a sample of assets to evaluate whether the data and significant assumptions were appropriately applied. The firm's sample was too small to provide sufficient appropriate audit evidence because in determining the sample size the firm did not take into account tolerable misstatement and the allowable risk of incorrect acceptance. (AS 1105.A8c; AS 2315.16 .23 and .23A)

The sample sizes the firm used in certain of its substantive procedures to test certain assets acquired and liabilities assumed 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 firm's substantive procedures to test certain acquired deferred revenue consisted of selecting a sample of transactions for testing. The firm's sample was too small to provide sufficient appropriate audit evidence because in determining the sample size the firm did not take into account tolerable misstatement the allowable risk of incorrect acceptance and the characteristics of the population. (AS 2315.16 .23 and .23A)

During the year the issuer acquired a business. The following deficiencies were identified: · The sample size the firm used in its substantive procedures to test accounts receivable at the acquisition date was too small to provide sufficient appropriate audit evidence because the firm did not take into account the relevant factors in determining its sample size including tolerable misstatement and the allowable risk of incorrect acceptance. (AS 2315.16 .23 and .23A) Unrelated to our review the issuer reevaluated its accounting for this business combination and concluded that material misstatements existed that had not been previously identified. The issuer subsequently corrected these misstatements in a restatement of its financial statements and the firm revised and reissued its report on the financial statements.

During the year the issuer acquired multiple businesses including commercial loan portfolios that consisted of various subtypes. The following deficiencies were identified: · In determining its sample sizes used to test the acquired commercial loans the firm did not take into account tolerable misstatement. As a result the samples that the firm used to test the valuation of these loans were too small to provide sufficient appropriate evidence. (AS 2315.16 .23 and .23A)

During the year the issuer acquired a business and engaged specialists to determine the fair values of certain acquired assets using various significant assumptions. The following deficiencies were identified: · The sample size the firm used in its substantive procedures to test the fair values of certain other acquired assets was too small to provide sufficient appropriate audit evidence because in determining the sample size the firm did not take into account the tolerable misstatement for the population. (AS 2315.16 .23 and .23A)