Explorer

During the year the issuer entered into a transaction and engaged a specialist to assist it in determining the fair value of a certain liability recorded in connection with the transaction. The following deficiencies were identified: · The firm's approach for substantively testing the fair value of this liability was to test the issuer's process and the firm used an auditor-engaged specialist to assist it with evaluating the significant assumptions the company's specialist used. The firm did not identify that the auditor-engaged specialist did not (1) perform any procedures to evaluate the reasonableness of a significant assumption and (2) evaluate whether certain external data that the company's specialist used to develop this significant assumption were relevant or reliable. (AS 1105.A8a and .A8b; AS 1210.09 and .12)

During the year the issuer entered into a transaction and engaged a specialist to assist it in determining the fair value of a certain liability recorded in connection with the transaction. The following deficiencies were identified: · The issuer recognized another liability in connection with this transaction. The firm did not evaluate whether the issuer appropriately assessed certain relevant information when it calculated this liability. (AS 2301.08 and .11)

The issuer determined the fair values of certain acquired assets using cash-flow forecasts. The following deficiency was identified: · The firm selected for testing a control that included the issuer's review of assumptions used in these cash flow forecasts. The firm did not evaluate the specific review procedures that the control owner performed to assess the reasonableness of certain of these assumptions. (AS 2201.42 and .44)

The issuer determined the fair values of certain acquired assets using cash-flow forecasts. The following deficiency was identified: · The firm selected for testing a control that included the issuer's review of assumptions used in these cash flow forecasts. The firm did not identify and test any controls over the accuracy and completeness of certain issuer-produced reports used in the operation of the control. (AS 2201.39)

The issuer determined the fair values of certain acquired assets using cash-flow forecasts. The following deficiency was identified: · The firm did not perform procedures to test or test any controls over the accuracy and completeness of certain issuer-produced reports used to develop certain assumptions that were used to determine these fair values. (AS 1105.10)

The issuer determined the fair values of certain acquired assets using cash-flow forecasts. The following deficiency was identified: · The firm did not sufficiently evaluate the reasonableness of certain significant assumptions the issuer used because the firm did not evaluate (1) the relevance and reliability of certain market information it used and (2) whether these assumptions were consistent with certain industry factors and existing market information. (AS 1105.04 and .06; AS 2501.16)

During the year the issuer acquired a business. The firm did not identify and evaluate the issuer's omission of certain disclosures required under FASB ASC Topic 805 Business Combinations. (AS 2810.30 and .31)

The firm's internal inspection program had inspected this audit reviewed these areas and also identified the deficiencies below. During the year the issuer acquired a business. The firm selected for testing controls that consisted of the issuer's reviews of the fair values of tangible assets acquired and liabilities assumed. The firm did not evaluate the specific review procedures that the control owners performed to assess the reasonableness of the fair values of certain of these tangible assets acquired and liabilities assumed. (AS 2201.42 and .44)

During the year the issuer acquired a business. The firm did not identify and test any controls over the valuation of assets acquired and liabilities assumed in a business combination. (AS 2201.39)

The firm did not perform any substantive procedures to test the fair value of inventory acquired in a business combination beyond obtaining a preliminary valuation report from the issuer-engaged specialist. (AS 2502.15)

The firm did not perform any substantive procedures to test the existence of certain inventory acquired. (AS 2301.08)

During the year the issuer acquired a business. The firm did not perform procedures to evaluate the reasonableness of a significant assumption used to estimate the amount of acquired intangible assets beyond inquiry with management. (AS 2501.16)

The issuer used external specialists to (1) determine the fair values of intangible assets acquired in a business combination completed during the year and (2) perform an impairment analysis of certain reporting units including the determination of the fair values of those reporting units. In each instance the estimated fair values were determined using issuer-prepared forecasted cash flows. The firm did not determine the likely sources of potential misstatement related to these forecasted cash flows and did not identify and test any controls that addressed the risks associated with the issuer's development of the forecasted cash flows. (AS 2201.30 and .39)

The firm's approach for testing the fair value of acquired intangible assets was to review and test management's process. The firm did not test the forecasted cash flows and the accuracy and completeness of other data that were provided to the external specialist. (AS 1210.12)

The firm's approach for testing the fair value of acquired intangible assets was to review and test management's process. The firm did not evaluate the reasonableness of the assumptions developed by the issuer or the external specialist. (AS 2502.26 and .28)

The firm selected for testing a control over the review of the fair value of the acquired intangible assets discussed above and concluded that it was deficient. The firm did not perform sufficient procedures to evaluate the severity of the control deficiency because it did not evaluate the magnitude of the potential misstatement resulting from the deficiency beyond relying on the results of its substantive procedures. (AS 2201.62)

During the year the issuer acquired a business and used an external specialist to determine the fair values of the acquired intangible assets and property plant and equipment ('PP&E'). The firm's approach for testing the fair value of these acquired assets was to review and test management's process. The firm did not perform any procedures beyond inquiring of management to test the forecasted cash flows that were provided to the external specialist. (AS 1210.12)

During the year the issuer acquired a business and used an external specialist to determine the fair values of the acquired intangible assets and property plant and equipment ('PP&E'). The firm's approach for testing the fair value of these acquired assets was to review and test management's process. The firm did not perform any procedures beyond inquiring of management to evaluate the reasonableness of the assumptions developed by the external specialist. (AS 2502.26 and .28)

The external specialist determined the fair value of the PP&E using an issuer-prepared asset listing. The firm did not sufficiently test the accuracy and completeness of the listing because it limited its procedures to comparing the asset listing to the PP&E roll-forward schedule and general ledger of the acquired business. (AS 1210.12)

The firm's approach for testing the fair value of acquired intangible assets was to review and test management's process. The firm did not perform any procedures beyond inquiring of management to test the forecasted cash flows after the first forecasted year that were provided to the external specialist to value the acquired intangible assets. (AS 1210.12)

During the year the issuer acquired a business and used an external specialist to determine the fair values of the acquired intangible assets. The firm did not determine the likely sources of potential misstatement related to the accounting for the business combination and did not identify and test any controls that addressed the risks associated with the business combination. (AS 2201.30 and .39)

The firm did not perform sufficient procedures to test the equity shares issued in consideration for an acquired business because the firm did not perform procedures to evaluate the terms of the agreement for the shares. (AS 2301.08)

During the year the issuer acquired certain businesses and engaged an external specialist to estimate the fair value of certain acquired assets. The issuer provided the external specialist prospective financial information and data that was used to determine the fair value of the assets. The firm's approach for testing the fair value of these assets was to review and test management's process. The firm did not perform any procedures to evaluate the reasonableness of the prospective financial information. (AS 1210.12)

During the year the issuer acquired certain businesses and engaged an external specialist to estimate the fair value of certain acquired assets. The issuer provided the external specialist prospective financial information and data that was used to determine the fair value of the assets. The firm's approach for testing the fair value of these assets was to review and test management's process. The firm did not test the accuracy and/or completeness of the issuer-provided data. (AS 1210.12)

During the year the issuer acquired a business. The firm selected for testing various controls over the accounting for the business combination which included the issuer's reviews of the significant assumptions used in the valuation of certain assets acquired and liabilities assumed. In testing the aspects of these controls related to the review of these assumptions the firm did not evaluate the review procedures that the control owners performed including the criteria that the control owners used to identify items for follow up and whether those items were appropriately resolved. (AS 2201.42 and .44)

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)

During the year the issuer acquired a business. The firm selected for testing a control over the valuation of certain acquired loans that consisted of the issuer's review of the significant assumptions that the issuer used in the valuation of these loans including the discount rate. The firm did not evaluate the specific review procedures the control owner performed to review two important components the issuer used to determine the discount rate. (AS 2201.42 and .44)

During the year the issuer entered into transactions including an acquisition which resulted in the recording of the fair value of investments. The firm selected for testing investments that met specific criteria. The firm did not perform any substantive procedures to test the portion of investments that did not meet these criteria. (AS 1105.27)

The firm did not perform procedures beyond inquiry to evaluate significant differences it identified when performing certain comparisons to test the reasonableness of certain assumptions underlying the cash-flow forecasts that the issuer used to determine the fair value of the investments discussed above. (AS 2502.26 .28 .31 and .36)

In addition the firm did not test the accuracy and completeness of certain data used in one of the comparisons. (AS 1105.10)

During the year the issuer acquired a business. The firm selected for testing controls over the accounting for the business combination which included the issuer's reviews of the data and significant assumptions that the issuer used in the valuation of certain obligations assumed in this acquisition. The firm did not evaluate the review procedures that the control owners performed including the criteria that the control owners used to identify items for follow up and whether those items were appropriately resolved. (AS 2201.42 and .44)

In its substantive testing the firm did not evaluate the reasonableness of the significant assumptions underlying the fair values of the obligations assumed. (AS 2502.26 and .28)

In addition the firm did not test the accuracy and completeness of data used to determine the fair values of these obligations assumed. (AS 2502.26 .28 and .39)

During the year the issuer acquired a business. The firm selected for testing a control that included the issuer's review of the significant assumptions used in the valuation of the intangible assets acquired in this transaction. The firm did not evaluate the review procedures that the control owners performed including the criteria that the control owners used to identify items for follow up and whether those items were appropriately resolved. (AS 2201.42 and .44)

The firm performed substantive procedures to evaluate the significant assumptions underlying the forecasts the issuer used in the valuation of the acquired intangible assets but did not obtain sufficient appropriate audit evidence related to the issuer's ability to carry out its cost-saving strategies to achieve these forecasts. (AS 2502.26 .28 .31 and .36)

During the year the issuer acquired a business. The firm selected for testing a control over the accounting for this business combination which included the issuer's review of the significant assumptions including forecasted revenue and EBITDA margins that the issuer used in the valuation of the acquired intangible assets. The firm did not evaluate the review procedures that the control owners performed to assess the reasonableness of the forecasted revenue and EBITDA margins including the criteria that the control owners used to identify items for follow up and whether those items were appropriately resolved. (AS 2201.42 and .44)

During the year the issuer acquired a business. The firm selected for testing controls that consisted of the issuer's review of the cash-flow forecasts used in the valuation of certain acquired intangible assets. The firm did not evaluate the specific review procedures that the control owners performed to assess the reasonableness of a revenue assumption underlying the cash-flow forecasts. (AS 2201.42 and .44)

The firm's approach for substantively testing the valuation of certain acquired intangible assets was to review and test management's process. The firm did not perform procedures beyond inquiring of management to evaluate the reasonableness of a revenue assumption underlying the cash-flow forecasts for any of the periods beyond the first two years of the 20-year forecast period. (AS 2502.26 .28 .31 and .36)

During the year the issuer acquired a business. The firm selected for testing controls over the accounting for the business combination which included the issuer's review of the assumptions underlying the cash-flow forecasts used in the valuation of the acquired intangible assets. The firm did not evaluate the review procedures that 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) In connection with our review the issuer reevaluated its controls over accounting for business combinations and concluded that a material weakness existed that had not been previously identified. The issuer subsequently revised its report on ICFR to reflect this material weakness and the firm revised its opinion on the effectiveness of the issuer's ICFR to express an adverse opinion and reissued its report.

The firm's approach for substantively testing the valuation of the acquired intangible assets was to review and test management's process. The firm performed certain comparisons to test the reasonableness of certain assumptions underlying the cash-flow forecasts that the issuer used to determine the fair value of the acquired intangible assets. The firm did not perform procedures beyond inquiring of management to evaluate the differences it identified in these comparisons. (AS 2502.26 .28 .31 and .36)

The firm's approach for substantively testing the valuation of the acquired intangible assets was to review and test management's process. The firm did not perform procedures beyond inquiring of management to evaluate the reasonableness of certain other assumptions underlying these cash-flow forecasts. (AS 2502.26 .28 .31 and .36)

During the year the issuer acquired a business. The issuer accounted for an acquired investment using the equity method and determined the fair value of certain acquired intangible assets using cash-flow forecasts. The following deficiency was identified: · The firm selected for testing controls over the accounting for this business combination which included the issuer's review of assumptions used in these cash-flow forecasts. The firm did not evaluate the specific review procedures the control owner performed to assess (1) the appropriateness of the accounting for this investment and certain acquired assets and (2) the reasonableness of certain of these assumptions. (AS 2201.42 and .44)

During the year the issuer acquired a business. The issuer accounted for an acquired investment using the equity method and determined the fair value of certain acquired intangible assets using cash-flow forecasts. The following deficiency was identified: · The firm's approach for substantively testing the valuation of these acquired intangible assets was to test the issuer's process. The firm did not perform any procedures to evaluate the reasonableness of certain significant assumptions used in these cash-flow forecasts. (AS 2501.16)

During the year the issuer acquired a business. The issuer accounted for an acquired investment using the equity method and determined the fair value of certain acquired intangible assets using cash-flow forecasts. The following deficiency was identified: · The firm did not perform any procedures to evaluate whether the accounting for this acquired investment and certain acquired assets was in conformity with FASB ASC Topic 323 Investments – Equity Method and Joint Ventures and FASB ASC Topic 970 Real Estate – General. Further the firm did not perform any substantive procedures to test the existence of these acquired assets. (AS 2301.08)

During the year the issuer acquired a business and determined the fair value of certain acquired intangible assets using cash-flow forecasts. The following deficiency was identified: · The firm selected for testing a control that included the issuer's review of assumptions used in these cash-flow forecasts. The firm did not evaluate the specific review procedures that the control owners performed to assess the reasonableness of certain of these assumptions. (AS 2201.42 and .44)

During the year the issuer acquired a business and determined the fair value of certain acquired intangible assets using cash-flow forecasts. The following deficiency was identified: · The firm's approach for substantively testing the valuation of these acquired intangible assets was to test the issuer's process. The firm did not sufficiently evaluate the reasonableness of certain significant assumptions used in these cash-flow forecasts because its procedures were limited to inquiring of management and for one of these assumptions comparing the current-year forecasted results to actual results. (AS 2501.16)

During the year the issuer acquired a business. The following deficiency was identified: · The firm selected for testing controls that consisted of the issuer's reviews of the fair values of assets acquired and liabilities assumed including the assumptions and data the issuer used. The firm did not evaluate the specific review procedures that the control owners performed to assess (1) the fair values of certain tangible assets acquired and liabilities assumed and (2) the reasonableness of certain of these assumptions. (AS 2201.42 and .44)

During the year the issuer acquired a business. The following deficiency was identified: · The firm selected for testing controls that consisted of the issuer's reviews of the fair values of assets acquired and liabilities assumed including the assumptions and data the issuer used. The firm did not test the aspects of one of these controls that addressed the accuracy and completeness of certain of these data. (AS 2201.42 and .44)

During the year the issuer acquired a business. The following deficiency was identified: · The firm's approach for substantively testing the fair values of these acquired intangible assets was to test the issuer's process. The firm did not sufficiently evaluate the reasonableness of certain of the significant assumptions the issuer used because the firm did not evaluate whether these assumptions were consistent with certain industry factors and the issuer's historical experience. (AS 2501.16)

During the year the issuer acquired a business. The following deficiency was identified: · The firm's approach for substantively testing the fair values of these acquired intangible assets was to test the issuer's process. The firm did not perform any procedures to test the accuracy and completeness of certain issuer-produced data that the company's specialist used to determine the fair value of certain of these acquired intangible assets. (AS 1105.A8a)