Explorer

With respect to user access: · The firm selected for testing certain controls over the restriction of access to these IT systems. In its testing of the operating effectiveness of one of these controls the firm did not evaluate whether access was appropriately restricted beyond inquiring of management. (AS 2201.42 and .44)

The firm did not identify and test any controls that addressed the issuer's presentation of deferred revenue. (AS 2201.39)

The firm did not identify and evaluate that the issuer's presentation of certain deferred revenue was not in conformity with FASB ASC Topic 210 Balance Sheet. (AS 2810.30 and .31)

With respect to user access: · The firm selected for testing a control over the issuer's review of requested user access to these IT systems. In its testing of the operating effectiveness of this control the firm excluded a certain type of user from its testing population and instead replaced one of the users selected with one of the excluded type of users. (AS 2201.44)

With respect to user access: · The firm selected for testing a control over the issuer's periodic review of previously granted access to these IT systems. In its testing of operating effectiveness the firm did not test beyond inquiry the aspect of the control that addressed the accuracy and completeness of the reports used in the operation of the control. (AS 2201.44)

As a result of the firm's ITGC testing deficiencies for revenue unbilled accounts receivable and deferred revenue the firm did not perform sufficient procedures to test or sufficiently test controls over the accuracy and completeness of certain system-generated data or reports the firm used (1) to make its selections to test certain controls or (2) in its substantive testing. (AS 1105.10)

The firm selected for testing automated controls over the timing of revenue recognition the approval of sales discounts and the calculation of contract progress. The firm did not sufficiently test the design and operating effectiveness of these automated controls as it limited its testing to only certain scenarios without identifying and/or evaluating all relevant configurations. Further for one of these controls the firm tested an aspect of this control in the issuer's IT testing environment rather than in its production environment without performing any procedures to determine whether the testing environment was a complete replica of the production environment. (AS 2201.42 and .44)

Certain of the issuer's revenue arrangements included multiple performance obligations. The issuer allocated the total transaction price for each of these arrangements to the separate performance obligations based on the relative standalone selling prices. The firm did not perform any substantive procedures to evaluate the reasonableness of the standalone selling prices that the issuer established. (AS 2301.08)

The issuer used certain information technology (IT) systems to initiate process and/or record transactions related to revenue unbilled accounts receivable deferred revenue and inventory. In its testing of controls over these accounts the firm tested various automated and 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 IT general controls (ITGCs) the firm's testing of these automated and IT-dependent manual controls was not sufficient. (AS 2201.46)

With respect to change management: · The firm selected for testing a control over the segregation of duties related to the ability to develop and implement changes to these IT systems. In its testing of the operating effectiveness of this control the firm did not test whether users with the ability to implement changes also had the ability to develop changes. (AS 2201.44)

With respect to change management: · The firm selected for testing certain controls over change management for these IT systems but did not perform sufficient procedures to test the completeness of the population of changes from which it made its selections for testing because it limited its procedures to testing the completeness of only one type of change. (AS 1105.10)

With respect to user access: · The firm selected for testing certain controls over the restriction of access to these IT systems. In its testing of the operating effectiveness of one of these controls the firm excluded a certain type of user from its testing population. (AS 2201.44)

The firm's internal inspection program inspected this audit and reviewed the revenue area but did not identify the deficiency below. The firm's substantive procedures to test two types of revenue and the deferred revenue related to one of these types of revenue consisted of performing substantive analytical procedures and tests of details. The following deficiency was identified: · For both types of revenue the firm used certain system-generated data or reports in its substantive analytical procedures but did not test or test any controls over the accuracy and/or completeness of these data or reports. (AS 2305.16)

The firm's internal inspection program inspected this audit and reviewed the revenue area but did not identify the deficiency below. The firm's substantive procedures to test two types of revenue and the deferred revenue related to one of these types of revenue consisted of performing substantive analytical procedures and tests of details. The following deficiency was identified: · For one of these types of revenue and the related deferred revenue the firm's tests of details included comparing amounts the issuer recorded to revenue and deferred revenue to cash receipts included in the issuer's bank statements. The firm did not perform any procedures to test certain reconciling items it identified in these comparisons. (AS 2301.08 and .13)

The firm used certain issuer-produced data in its substantive testing of one type of revenue and the related deferred revenue but did not test or test any controls over the accuracy of these data. (AS 1105.10)

The firm did not identify and evaluate the issuer's omission of certain required disclosures related to revenue under FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2810.30 and .31) In connection with our review the issuer reevaluated its disclosures related to revenue and determined that certain disclosures were omitted. The issuer did not file an amended Form 10-K or Form 8-K indicating that its previously issued financial statements should not be relied on. Instead the issuer corrected these omissions in a subsequent filing.

With respect to Deferred Revenue the firm did not perform any substantive procedures to test revenue and deferred revenue. (AS 2301.08)

The firm's substantive procedures to test two revenue categories and deferred revenue related to one of these categories included analytical procedures in which the firm compared the revenue and deferred revenue balances to the amounts in the prior year. The firm did not perform procedures to obtain evidence that the prior-year balances would be predictive of current-year balances. (AS 2305.13 and .14)

The firm identified a fraud risk related to one of these categories of revenue. The firm did not perform tests of details beyond the procedures discussed below over this revenue category in response to the fraud risk. (AS 2301.13)

The firm performed procedures to test deferred revenue by selecting a sample of monthly activity from a summary schedule. These procedures did not provide sufficient appropriate audit evidence of the completeness of deferred revenue because the firm only selected activity from recorded deferred revenue. Further the firm did not test the transactions underlying the activity in the months selected for testing. (AS 2315.17 and .25)

The firm did not perform any substantive procedures to evaluate the classification of deferred revenue as current or non-current. (AS 2301.08)

The firm did not identify and evaluate GAAP departures related to the issuer's omission of disclosures related to revenue and deferred revenue that are required by FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2810.30 and .31)

For certain other revenue and the related deferred revenue the following deficiency was identified: • The firm did not evaluate whether the issuer was acting as a principal or as an agent for this revenue. (AS 2301.08)

For certain other revenue and the related deferred revenue the following deficiency was identified: • The firm did not perform procedures to test a revenue transaction it selected for testing beyond performing procedures on the related cost of goods sold. (AS 2301.08)

For certain other revenue and the related deferred revenue the following deficiency was identified: • During the year for another transaction the issuer recognized certain revenue that had been previously deferred. The firm did not perform procedures beyond a certain recalculation to test the appropriateness of the recognition of this revenue in the current year and the continued deferral of the remaining revenue for this transaction. (AS 2301.08)

The firm was instructed by the principal auditor to perform certain procedures to test the existence of deferred revenue. The firm selected a sample of balances to test certain deferred revenue but did not perform any procedures to evaluate whether the balances represented liabilities as of year end. (AS 2301.08)

The firm was instructed by the principal auditor to perform certain procedures to test the existence of deferred revenue. The firm did not perform procedures to test or identify and test any controls over the completeness of an issuer-prepared report from which it made certain of its selections for testing. (AS 1105.10)

The firm selected for testing controls over these two types of revenue and the related deferred revenue. The firm did not identify and test any controls over the accuracy and completeness of certain information that the control owners used in the performance of these controls. (AS 2201.39) In connection with our review the issuer reevaluated its controls 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 modified its opinion on the effectiveness of the issuer's ICFR to express an adverse opinion and reissued its report.

The firm did not perform substantive procedures to test or test controls over the accuracy and completeness of certain information used in its substantive testing of this revenue and deferred revenue. (AS 1105.10)

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

The issuer used multiple IT systems to initiate process and/or record transactions related to certain revenue deferred revenue goodwill and/or intangible assets. In its testing of controls over these accounts the firm tested various automated and IT-dependent manual controls that used data and reports generated or maintained by certain of these IT systems. With respect to segregation of duties: · For certain IT systems the firm did not identify and test any controls that addressed the risk related to whether users with the ability to develop changes also had the ability to implement these changes. (AS 2201.39)

The issuer used multiple IT systems to initiate process and/or record transactions related to certain revenue deferred revenue goodwill and/or intangible assets. In its testing of controls over these accounts the firm tested various automated and IT-dependent manual controls that used data and reports generated or maintained by certain of these IT systems. With respect to segregation of duties: · For certain other IT systems the firm selected for testing a control that consisted of the review of segregation of duties. The firm did not test the aspect of the control that addressed whether certain users with the ability to implement changes also had the ability to develop those changes. (AS 2201.42 and .44)

The issuer used multiple IT systems to initiate process and/or record transactions related to certain revenue deferred revenue goodwill and/or intangible assets. In its testing of controls over these accounts the firm tested various automated and IT-dependent manual controls that used data and reports generated or maintained by certain of these IT systems. With respect to change management: · For certain IT systems the firm selected for testing an automated control over change management. The firm did not sufficiently test the operating effectiveness of this control because the firm did not test whether the control operated as designed for each processing alternative. (AS 2201.44)

The issuer used multiple IT systems to initiate process and/or record transactions related to certain revenue deferred revenue goodwill and/or intangible assets. In its testing of controls over these accounts the firm tested various automated and IT-dependent manual controls that used data and reports generated or maintained by certain of these IT systems. With respect to change management: · For certain IT systems the firm did not test or in the alternative test any controls over the completeness of the system-generated reports that it used to make its selections for testing certain controls over change management. (AS 1105.10)

As a result of the firm's ITGC testing deficiencies the firm did not perform sufficient other audit procedures as follows: · For certain revenue deferred revenue goodwill and intangible assets the firm did not perform sufficient substantive procedures to test or sufficiently test controls over the accuracy and completeness of certain system-generated data or reports (1) the firm used to make its selections to test certain controls; (2) the firm used in its substantive testing including analytical procedures; or (3) the company's specialists used. (AS 1105.10 and .A8a; AS 2305.16)

As a result of the firm's ITGC testing deficiencies the firm did not perform sufficient other audit procedures as follows: · The firm's substantive procedures to test certain revenue and deferred revenue included substantive analytical procedures. The firm established its thresholds for investigating differences based on a level of control reliance that was not supported due to the above deficiencies in the firm's testing of controls. As a result the thresholds that the firm used did not provide the desired level of assurance that misstatements that could have been material would be identified. (AS 2301.16 .18 and .37; AS 2305.20)

As a result of the firm's ITGC testing deficiencies the firm did not perform sufficient other audit procedures as follows: · The sample size the firm used in certain of its substantive procedures to test certain deferred revenue was too small to provide sufficient appropriate audit evidence because these procedures were designed based on a level of control reliance that was not supported. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A)

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

The issuer used multiple IT systems to initiate process and/or record transactions related to certain revenue and/or deferred revenue. In its testing of controls over these accounts the firm tested various automated and IT-dependent manual controls that used data and reports generated or maintained by certain of these IT systems. With respect to segregation of duties: · For two IT systems the firm selected for testing a control that consisted of the review of segregation of duties. The firm did not test the aspect of the control that addressed whether certain users with administrative access to the tool used to implement changes also had the ability to develop these changes. (AS 2201.42 and .44)

The issuer used multiple IT systems to initiate process and/or record transactions related to certain revenue and/or deferred revenue. In its testing of controls over these accounts the firm tested various automated and IT-dependent manual controls that used data and reports generated or maintained by certain of these IT systems. With respect to segregation of duties: · For another IT system the firm selected for testing two controls that consisted of the review of segregation of duties. The firm did not test beyond inquiry the aspect of the controls that addressed whether certain users with access to the tools used to implement changes also had the ability to develop these changes. (AS 2201.42 and .44)

The issuer used multiple IT systems to initiate process and/or record transactions related to certain revenue and/or deferred revenue. In its testing of controls over these accounts the firm tested various automated and IT-dependent manual controls that used data and reports generated or maintained by certain of these IT systems. With respect to segregation of duties: · For an additional IT system the firm selected for testing an automated control that was designed to address the risk of developers being able to implement changes. The firm's procedures were not sufficient because they did not test the configuration or programming of the automated control or perform other procedures that would have provided sufficient appropriate audit evidence that the control was designed and operating effectively. (AS 2201.42 and .44)

The issuer used multiple IT systems to initiate process and/or record transactions related to certain revenue and/or deferred revenue. In its testing of controls over these accounts the firm tested various automated and IT-dependent manual controls that used data and reports generated or maintained by certain of these IT systems. With respect to change management for one of these IT systems the firm did not identify and test any controls over changes to the underlying master data. (AS 2201.39)

As a result of the firm's ITGC testing deficiencies for certain revenue and deferred revenue the firm did not perform sufficient substantive procedures to test or sufficiently test controls over the accuracy and completeness of certain system-generated data or reports (1) the firm used to make its selections to test certain controls; (2) the firm used in its substantive testing including analytical procedures; or (3) the company's specialists used. (AS 1105.10 and .A8a; AS 2305.16)

The issuer used an IT system to retain certain data related to revenue and deferred revenue. The firm tested certain IT-dependent manual controls that used data from this IT system. As a result of the deficiencies in the firm's testing of controls the firm's testing of these IT-dependent manual controls was not sufficient. (AS 2201.46)

The issuer used an IT system to retain certain data related to revenue and deferred revenue. The firm did not identify and test any controls that addressed the risk that inappropriate changes could be made to the data in this IT system. (AS 2201.39)

The issuer used an IT system to retain certain data related to revenue and deferred revenue. The firm selected for testing a control that included the issuer's review of the configuration of the tool the issuer used to transfer data into this IT system. The firm did not evaluate the specific review procedures that the control owners performed to assess the configuration of this tool. (AS 2201.42 and .44)

The issuer used an IT system to retain certain data related to revenue and deferred revenue. The firm selected for testing a control that included the issuer's review of the configuration of the tool the issuer used to transfer data into this IT system. In evaluating the design of this control the firm did not assess whether the issuer's review occurred with sufficient frequency to address the risks of material misstatement. (AS 2201.42)

For certain revenue and deferred revenue the firm did not perform procedures to test or sufficiently test controls over the accuracy and/or completeness of certain system-generated data or reports the firm used in its substantive testing including substantive analytical procedures. (AS 1105.10; AS 2305.16)

Certain of the issuer's revenue arrangements included multiple performance obligations. The issuer allocated the total transaction price for each of these arrangements to the separate performance obligations based on the issuer's estimate of the relative standalone selling prices. The firm performed substantive procedures to test the accuracy of certain issuer-produced data the firm used in its testing of the relative standalone selling prices. The sample sizes the firm used in these substantive procedures were smaller than the ones the firm determined necessary to provide sufficient appropriate audit evidence. (AS 1105.10)

The issuer recognized certain of this revenue based on the date when electronic delivery occurred. The firm did not identify and test any controls over the accuracy of these delivery dates. (AS 2201.39)