Explorer

For two business combinations the firm's approach for substantively testing the fair values of the provisions for contingent consideration to be paid to the sellers was to develop independent expectations of the estimates using an auditor-employed specialist. The following deficiency was identified: · For one of these business combinations the firm did not evaluate a significant difference between the firm's independent expectation and the issuer's recorded contingent consideration. (AS 2810.13)

During the year the issuer acquired a business and engaged a specialist to assist it in determining the fair values of certain acquired assets using various significant assumptions. The following deficiency was identified: · In its testing of the fair values of certain acquired assets the firm used the company's specialist's valuation report as audit evidence without performing procedures to evaluate the work of the company's specialist. (AS 1105.A6-.A10; AS 2501.07)

During the year the issuer acquired a business and engaged a specialist to assist it in determining the fair values of an acquired intangible asset and the consideration transferred using various significant assumptions. The firm's approach for substantively testing the fair values of the acquired intangible asset and the consideration transferred was to test the issuer's process. The following deficiencies were identified: · With respect to the fair value of a portion of the consideration transferred the firm did not evaluate whether the method used by the issuer to determine the fair value was in conformity with FASB ASC Topic 820 Fair Value Measurement. Further the firm did not evaluate certain information provided by the company's specialist that suggested that the issuer's method to determine the fair value of this consideration may not be appropriate. (AS 2501.10; AS 2810.03)

The issuer acquired multiple businesses which included acquiring intangible assets. In addition during the year events or changes in circumstances existed indicating that the carrying value of these acquired intangible assets may not be recoverable. The issuer engaged a specialist to assist it in (1) determining the initial fair values of these acquired intangible assets and the provision for contingent consideration to be paid to the sellers and (2) performing an assessment of these acquired intangible assets for impairment. The following deficiencies were identified as of the acquisition date and/or at year end: · The firm did not perform any procedures to evaluate the relevance and reliability of certain of this information used by the company's specialist in determining the fair value of the contingent consideration. (AS 1105.A8a)

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 firm did not perform any substantive procedures to test the fair value of acquired inventory. (AS 2501.07)

During the year the issuer acquired multiple businesses and engaged specialists to determine the fair values of certain acquired assets using various assumptions. For these business combinations the firm's approach to substantively test the fair values of certain of these acquired assets consisted of (1) testing the issuer's process and (2) developing independent expectations of the fair values as a range and the firm used an auditor-employed specialist in each approach. The following deficiencies were identified: · In testing the issuer's process the firm did not perform procedures to test the accuracy of certain issuer-produced data that the company's specialists used to develop the fair values of these assets. (AS 1105.A8a)

During the year the issuer acquired multiple businesses and engaged specialists to determine the fair values of certain acquired assets using various assumptions. For these business combinations the firm's approach to substantively test the fair values of certain of these acquired assets consisted of (1) testing the issuer's process and (2) developing independent expectations of the fair values as a range and the firm used an auditor-employed specialist in each approach. The following deficiencies were identified: · In developing its independent expectations the firm did not identify that the work of the auditor-employed specialist did not provide sufficient appropriate audit evidence because it did not evaluate whether the independent expectations of the fair values as a range encompassed only reasonable outcomes and were supported by sufficient appropriate audit evidence. (AS 1201.C6 and .C7; AS 2501.25)

During the year the issuer acquired multiple businesses and engaged specialists to determine the fair values of certain acquired assets using various assumptions. For these business combinations the firm's approach to substantively test the fair values of certain of these acquired assets consisted of (1) testing the issuer's process and (2) developing independent expectations of the fair values as a range and the firm used an auditor-employed specialist in each approach. The following deficiencies were identified: · In developing its independent expectations the firm did not identify that the auditor-employed specialist did not evaluate the relevance and reliability of certain external data that it used to develop its independent expectations. (AS 1105.04 and .06; AS 1201.C6 and .C7)

During the year the issuer acquired a business and engaged an external specialist to assist in determining the purchase price allocation and fair values of the acquired assets including certain goodwill and other intangible assets. The following deficiency was identified. • The firm did not perform procedures to evaluate the work of the company's specialist. (AS 1105.A6 - .A10)

During the year the issuer acquired a business and engaged an external specialist to assist in determining the fair values of the acquired assets including certain intangible assets. The following deficiency was identified. • The firm did not perform procedures to evaluate the relevance and reliability of certain industry and other external information provided by the issuer that was used by the firm to evaluate the reasonableness of the issuer's revenue forecast. (AS 1105.04 and .06)

During the year the issuer acquired a business and engaged an external specialist to assist in determining the fair values of the acquired assets including certain intangible assets. The following deficiency was identified. • The firm did not perform sufficient procedures to evaluate the reasonableness of the issuer's revenue forecasts used by the company's specialist to determine the fair values of the intangible assets because it did not (1) perform procedures to evaluate whether the issuer had a reasonable basis for these significant assumptions and (2) take into account the issuer's intent and ability to meet the revenue predictions including whether the issuer has the financial resources and/or other means to meet the projections. (AS 2501.16 and .17)

During the year the issuer acquired a business and engaged an external specialist to assist in determining the purchase price allocation and fair values of the acquired assets including certain goodwill and other intangible assets. The following deficiency was identified. • The firm did not perform procedures to test the purchase price allocation and fair value of the goodwill and other intangible assets acquired in the business combination beyond obtaining and reading the valuation reports prepared by the company's specialist and agreeing amounts from those reports to the general ledger. (AS 2501.07)

The firm did not evaluate the relevance and reliability of information used by an external specialist engaged by the issuer to determine the fair value of certain acquired assets. (AS 2502.31)

The firm's approach for substantively testing the reserve estimates was to test the issuer's process. The firm did not perform sufficient procedures to test the reserve estimates because the firm did not: · Evaluate the relevance and reliability of external data used by the company's specialist to develop the reserve estimates; (AS 1105.A8a)

The firm's approach for substantively testing the reserve estimates was to test the issuer's process. The firm did not perform sufficient procedures to test the reserve estimates because the firm did not: · Evaluate whether the methods used by the company's specialist to develop the reserve estimates were appropriate under the circumstances taking into account the requirements of the applicable financial reporting framework beyond inquiry of the methods used with the company's specialist. (AS 1105.A8c)

During the year the issuer completed a business combination and used various significant assumptions including reserves and resources estimates from a report (“technical report”) prepared by external specialists engaged by the acquired company to estimate and record the fair value of an acquired asset and assumed liability. The issuer utilized internal specialists (the “company's employed specialists”) to assess the reasonableness of the reserves and resources estimates reflected in the technical report by remodeling the estimates and comparing the results to the estimates reflected in the technical report. The firm's approach for substantively testing the fair value of the acquired asset and assumed liability from the business combination was to test the issuer's process. The following deficiency was identified: • The firm did not evaluate the reasonableness of the reserves and resources estimates as reflected in the technical report which were considered by the firm to be significant assumptions used by the issuer to estimate the fair value of the acquired asset and assumed liability beyond obtaining and reading the technical report prepared by the acquired company's external specialists. Further the firm did not perform procedures to evaluate the work of the company's employed specialists. (AS 1105.A6 -.A10; AS 2501.16)

For another business combination the issuer used an external specialist to estimate the fair value of certain of the acquired assets. For certain assets the fair values were determined using forecasted cash flows. The following deficiencies were identified: - As part of its assessment of the reasonableness of the cash-flow forecast for a certain asset the firm obtained evidence that appeared to contradict an assumption used by the specialist with respect to asset quantities. The firm did not perform procedures beyond inquiry of management to evaluate this contradictory evidence. (AS 2502.26 .28 .31 and .36)

For another business combination the issuer used an external specialist to estimate the fair value of certain of the acquired assets. For certain assets the fair values were determined using forecasted cash flows. The following deficiencies were identified: - The firm did not perform any procedures to test the completeness of certain liabilities assumed. (AS 2301.08)

For another business combination the issuer used an external specialist to estimate the fair value of certain of the acquired assets. For certain assets the fair values were determined using forecasted cash flows. The following deficiencies were identified: - The firm did not perform any procedures to test the fair value of certain liabilities assumed. (AS 2502.15)

For another business combination the issuer used an external specialist to estimate the fair value of certain of the acquired assets. For certain assets the fair values were determined using forecasted cash flows. The following deficiencies were identified: - The firm did not identify and appropriately address an inconsistency between the issuer's disclosure of goodwill and other liabilities associated with this acquisition and the issuer's supporting documentation. (AS 2810.30 and .31)

During the year the issuer acquired certain businesses and engaged an external specialist to estimate the fair values of the acquired intangible assets. The issuer provided the specialist with financial projections and other data that were used in the valuations. The following deficiencies were identified: · The firm did not sufficiently evaluate the sales forecast that was provided to the specialist to value the trade name and customer relationship intangible assets because its procedures were limited to inquiring of management and comparing the forecast to the issuer's historical financial information without performing procedures to evaluate whether the issuer's historical growth rates would be representative of the issuer's future sales growth. (AS 1210.12)

During the year the issuer acquired certain businesses and engaged an external specialist to estimate the fair values of the acquired intangible assets. The issuer provided the specialist with financial projections and other data that were used in the valuations. The following deficiencies were identified: · The firm did not evaluate whether the attrition rates that the specialist used to value the customer relationships intangible assets reflected (1) future retention of the issuer's long-term relationships with its largest customers and (2) those customers' proportionate share of historical sales. (AS 2502.26 .28 and .31)

During the year the issuer acquired certain businesses and engaged an external specialist to estimate the fair values of the acquired intangible assets. The issuer provided the specialist with financial projections and other data that were used in the valuations. The following deficiencies were identified: · The firm did not evaluate the issuer's conclusion that separately identifiable intangible assets did not exist related to the revenue expected to be derived from the existing user base of each acquired business in conformity with FASB ASC Topic 805 Business Combinations. (AS 2810.30)

During the year the issuer acquired certain businesses and engaged an external specialist to estimate the fair values of the acquired intangible assets. The issuer provided the specialist with financial projections and other data that were used in the valuations. The following deficiencies were identified: · The firm selected for testing a control that included management's review of certain assumptions used in the valuations. The firm did not identify and test any controls over the preparation of the financial projections that were provided to the specialist. (AS 2201.39)

The issuer acquired a business and engaged an external specialist to determine the fair value of an acquired intangible asset. The firm's approach for testing the fair value was to review and test management's process. The following deficiencies were identified: · The firm did not evaluate the reasonableness of the equity risk premium rate and income tax rate used by the specialist to determine the fair value of the acquired intangible asset. (AS 2502.26 and .28)

The issuer acquired a business and engaged an external specialist to determine the fair value of an acquired intangible asset. The firm's approach for testing the fair value was to review and test management's process. The following deficiencies were identified: · The firm did not sufficiently evaluate the issuer-provided operating forecast used by the specialist to value the intangible asset because its procedures were limited to inquiring of management and comparing the forecast to the issuer's historical financial information without performing procedures to evaluate whether the issuer's historical performance would be representative of the issuer's future operations. (AS 1210.12)

During the year the issuer completed a business combination and engaged multiple specialists to determine the fair value of certain acquired assets including acquired intangible assets and certain assumed liabilities. The following deficiency was identified: • The firm did not identify and test any controls over the prospective financial information developed by the issuer and used by the company's specialist to determine the fair value of certain intangible assets acquired. (AS 2201.39)

During the year the issuer completed a business combination and engaged multiple specialists to determine the fair value of certain acquired assets including acquired intangible assets and certain assumed liabilities. The following deficiency was identified: • The firm did not perform any procedures to test the existence of the fixed assets acquired. (AS 2301.08 and .11)

During the year the issuer completed a business combination and engaged multiple specialists to determine the fair value of certain acquired assets including acquired intangible assets and certain assumed liabilities. The following deficiency was identified: • The firm did not perform sufficient procedures to evaluate the relevance and reliability of one of the company's specialists' work related to certain assumed liabilities because it did not evaluate the restriction the specialist placed on the intended users of the report and perform additional procedures to address the matter. (AS 1105.A9 and .A10)

During the year the issuer acquired a business and engaged a specialist to assist it in determining the fair value of the resulting noncontrolling interest and goodwill. The following deficiency was identified: · The firm did not perform any procedures to evaluate the reliability of certain information used by the company's specialist to determine the fair value of these accounts. (AS 1105.A8a)

The firm's internal inspection program had inspected this audit and reviewed certain of these areas and identified the deficiencies below in the related areas reviewed. During the year the issuer acquired a business and engaged an external specialist to assist in determining the fair value of the consideration and intangible assets. The following deficiency was identified: · The firm did not test the existence completeness accuracy and fair value of the tangible assets acquired and liabilities assumed as of the acquisition date. (AS 2301.08; AS 2501.07)

The firm's internal inspection program had inspected this audit and reviewed certain of these areas and identified the deficiencies below in the related areas reviewed. During the year the issuer acquired a business and engaged an external specialist to assist in determining the fair value of the consideration and intangible assets. The following deficiency was identified: · The firm did not perform procedures to test the fair value of the intangible assets and certain of the paid consideration beyond obtaining the draft report from the company's specialist. Further the firm did not perform procedures with respect to its use of the work of the company's specialist as audit evidence beyond testing certain terms related to the paid consideration and performing certain recalculations. (AS 1105.A1 - .A10; AS 2501.07)

The firm's internal inspection program had inspected this audit and reviewed certain of these areas and identified the deficiencies below in the related areas reviewed. During the year the issuer acquired a business and engaged an external specialist to assist in determining the fair value of the consideration and intangible assets. The following deficiency was identified: · The firm did not identify and evaluate a departure from GAAP related to the issuer's omission of a disclosure related to this business combination required by FASB ASC Topic 805 Business Combinations. (AS 2810.30 and .31)

The issuer used an external valuation specialist to determine the fair value of the acquired entity. The firm's approach for substantively testing the fair value of the acquired entity was to review and test management's process. The firm did not perform any procedures to test the projections developed by the issuer that the external valuation specialist used. (AS 1210.12)

During the year the issuer acquired a business. The issuer assumed a liability related to warrants as a result of this acquisition and engaged a specialist to determine the fair values of these warrants. The firm did not perform any procedures to test the fair values of the warrants beyond reading the specialist's report. (AS 2501.07)

During the year the issuer acquired a business and engaged a specialist to determine the fair values of the acquired assets including certain intangible assets. The following deficiencies were identified: · The firm did not evaluate the relevance and reliability of the external data that the company's specialist used to determine the fair values of these intangible assets. (AS 1105.A8a)

During the year the issuer acquired a business and engaged a specialist to determine the fair values of the acquired assets including certain intangible assets. The following deficiencies were identified:

During the year the issuer acquired a business and engaged a specialist to assist it in determining the fair values of certain acquired intangible assets using various assumptions including forecasted revenue customer attrition rate and useful lives. Forecasted revenue included revenue for current contracts as well as projected revenue for contract renewals and expansions. The following deficiencies were identified: · The firm did not perform sufficient procedures to evaluate the reasonableness of the useful lives the issuer assigned to these intangible assets because it did not evaluate significant differences between the useful lives assigned to these assets and 1) the cash-flow forecast periods used to determine their fair values and/or 2) the remaining lives of the contracts. (AS 2501.16)

During the year the issuer acquired a business and engaged a specialist to assist it in determining the fair values of certain acquired intangible assets using various assumptions including forecasted revenue customer attrition rate and useful lives. Forecasted revenue included revenue for current contracts as well as projected revenue for contract renewals and expansions. The following deficiencies were identified: · The firm did not identify and evaluate the issuer's omission of certain disclosures required under FASB ASC Topic 820 Fair Value Measurement. (AS 2810.30 and .31)

During the year the issuer acquired a business and engaged a specialist to assist it in determining the fair values of certain acquired intangible assets using various assumptions including forecasted revenue customer attrition rate and useful lives. Forecasted revenue included revenue for current contracts as well as projected revenue for contract renewals and expansions. The following deficiencies were identified: · The firm did not sufficiently evaluate the reasonableness of the forecasted revenue because its procedures were limited to agreeing the total contract value for current contracts to customer contracts without testing projected revenue for contract renewals or expansions. (AS 2501.16)

During the year the issuer acquired a business and engaged a specialist to assist it in determining the fair values of certain acquired intangible assets using various assumptions including forecasted revenue customer attrition rate and useful lives. Forecasted revenue included revenue for current contracts as well as projected revenue for contract renewals and expansions. The following deficiencies were identified: · The firm did not sufficiently evaluate the reasonableness of the customer attrition rate because its procedures were limited to consideration of the issuer's pre-existing relationships with customers and certain qualitative industry factors. (AS 2501.16)