Explorer

With respect to one type of revenue and the related deferred revenue the following deficiency was identified: · The issuer recognized certain of this revenue using contractual rates input into the system the issuer used to recognize revenue. The firm did not identify and test any controls over the accuracy of these contractual rates. (AS 2201.39)

With respect to one type of revenue and the related deferred revenue the following deficiency was identified: · The firm selected for testing a control over the automated calculation of certain of this revenue. The firm did not test whether this control operated as designed for each relevant processing alternative. (AS 2201.44)

With respect to one type of revenue and the related deferred revenue the following deficiency was identified: · The firm selected for testing controls related to the issuer's allocation of certain transactions between this revenue and the related deferred revenue. For two of these controls the firm did not evaluate the specific review procedures that the control owners performed to assess the appropriateness of this allocation. (AS 2201.42 and .44)

With respect to one type of revenue and the related deferred revenue the following deficiency was identified: · The firm selected for testing controls related to the issuer's allocation of certain transactions between this revenue and the related deferred revenue. For a third control the firm did not identify and test any controls over the accuracy and completeness of certain data that the control owner used in the operation of the control. (AS 2201.39)

With respect to one type of revenue and the related deferred revenue the following deficiency was identified: · The firm's approach for substantively testing this revenue consisted primarily of performing a software-assisted analysis to test the relationships among revenue accounts receivable and cash receipts. The firm's approach to addressing the reliability of the audit evidence obtained from this type of analysis was dependent upon the firm's testing of certain data underlying the analysis. The firm did not sufficiently test this underlying data because for certain cash selections the firm did not evaluate whether the cash receipts related to this revenue. (AS 1105.10)

With respect to a second type of revenue and the related deferred revenue the following deficiency was identified: · The firm selected for testing controls that consisted of the issuer's reviews of this revenue and the related deferred revenue. The firm did not identify and test any controls over the accuracy of certain data and reports that the control owners used in the operation of these controls. (AS 2201.39)

With respect to a second type of revenue and the related deferred revenue the following deficiency was identified: · The sample size that the firm used in certain of its substantive procedures to test this 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 due to the deficiency in the firm's control testing discussed above (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A)

For these two types of deferred revenue the firm used certain reports in its substantive testing but did not perform any procedures to test or test any controls over the accuracy of these reports. (AS 1105.10)

For certain revenue and the related deferred revenue the firm did not identify and test any controls over certain data that the issuer used to determine whether the performance obligation was satisfied before revenue was recognized. (AS 2201.39)

The firm's approach for substantively testing this revenue and the related deferred revenue included performing a software-assisted analysis to test the relationships among revenue accounts receivable deferred revenue and cash receipts. The firm's approach to addressing the reliability of the audit evidence obtained from this type of analysis was dependent upon the firm's testing of certain data underlying the analysis. The sample the firm tested for the second half of the year was smaller than the one the firm determined necessary for these procedures. (AS 1105.10)

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

The issuer used multiple IT systems to initiate process and record transactions related to revenue and the related 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 these IT systems. As a result of the following 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 firm selected for testing a control over managing changes to the issuer's production environment for each of these IT systems. The following deficiencies were identified: · For two IT systems the firm did not identify and test any controls over the completeness of the populations of changes that the control owners used in the operation of the control. (AS 2201.39)

The firm selected for testing a control over managing changes to the issuer's production environment for each of these IT systems. The following deficiencies were identified: · For two other IT systems the firm did not perform sufficient procedures to test controls over the completeness of the populations of changes that the control owners used in the operation of the control because it limited its procedures to inspecting evidence that the control owner traced one system change into the populations used. (AS 2201.46)

The firm selected for testing a control over managing changes to the issuer's production environment for each of these IT systems. The following deficiencies were identified: · For another IT system when evaluating the design of the control the firm did not assess whether the control owner's review of system changes was sufficiently precise to achieve the control's objective. (AS 2201.42)

The issuer used a service organization to maintain databases that the issuer used in the recognition of revenue and the related deferred revenue. The firm obtained a service auditor's report and identified complementary user entity controls that the service auditor's report described as necessary. The firm did not perform procedures to evaluate whether the issuer had implemented these controls with respect to one of these databases. (AS 2201.39 and .B22)

The firm selected for testing various manual controls over the issuer's deferred revenue calculation. The following deficiencies were identified: · For three of these controls the firm did not identify and test any controls over the accuracy and completeness of certain data used in the operation of the controls. (AS 2201.39)

The firm selected for testing various manual controls over the issuer's deferred revenue calculation. The following deficiencies were identified: · For another of these controls the firm did not test or test any controls over the completeness of the population of items from which it selected its samples for testing. (AS 1105.10)

The firm's testing of an automated control over deferred revenue was not sufficient because the firm did not test the configuration or programming of this control or perform other procedures to test this control that would have provided sufficient appropriate audit evidence that this control was designed and operating effectively. (AS 2201.42 and .44)

For certain revenue and deferred revenue the firm did not perform any procedures to test or test any 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)

The issuer used multiple information-technology (IT) systems to initiate process and record transactions related to revenue and the related 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 these IT systems. As a result of the following 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) In connection with our review the issuer reevaluated its controls over revenue including IT controls and concluded that material weaknesses existed that had not been previously identified. The issuer subsequently reflected these material weaknesses in a revision to its report on ICFR and the firm revised and reissued its report on the effectiveness of the issuer's ICFR to include these additional material weaknesses.

With respect to revenue and deferred revenue at certain other business units that the firm subjected to less extensive audit procedures the following deficiencies were identified: · The firm selected for testing a control that consisted of the issuer's reconciliation of the business unit-level financial data to its consolidated general ledger. The firm did not identify and test any controls over the accuracy and completeness of the business unit-level data that the control owners used in the operation of this control. (AS 2201.39)

With respect to revenue and deferred revenue at certain other business units that the firm subjected to less extensive audit procedures the following deficiencies were identified: · The firm did not perform any substantive procedures to test revenue and deferred revenue for these business units. (AS 2301.08)

The issuer used multiple information-technology (IT) systems to initiate process and record transactions related to revenue and the related 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 these IT systems. ·The firm selected for testing a control over the segregation of duties related to the ability to develop and implement changes to certain of these IT systems. The firm did not test whether users with the ability to implement code changes also had the ability to develop those changes. Further the firm did not test whether the ability to implement configuration changes was appropriately restricted to authorized users. (AS 2201.42 and .44) In connection with our review the issuer reevaluated its controls over revenue including IT controls and concluded that material weaknesses existed that had not been previously identified. The issuer subsequently reflected these material weaknesses in a revision to its report on ICFR and the firm revised and reissued its report on the effectiveness of the issuer's ICFR to include these additional material weaknesses.

The issuer used multiple information-technology (IT) systems to initiate process and record transactions related to revenue and the related 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 these IT systems. ·The firm selected for testing controls that consisted of the issuer's testing and approval of system changes prior to implementation into the production environment. In its testing of the operating effectiveness of certain of these controls the firm excluded certain types of changes from its testing population. (AS 2201.44) In connection with our review the issuer reevaluated its controls over revenue including IT controls and concluded that material weaknesses existed that had not been previously identified. The issuer subsequently reflected these material weaknesses in a revision to its report on ICFR and the firm revised and reissued its report on the effectiveness of the issuer's ICFR to include these additional material weaknesses.

The issuer used multiple information-technology (IT) systems to initiate process and record transactions related to revenue and the related 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 these IT systems. ·The firm selected for testing controls that consisted of the issuer's testing and approval of system changes prior to implementation into the production environment. For certain other of these controls the firm did not test or test any controls over the completeness of the population of items from which it selected its sample for testing. (AS 1105.10) In connection with our review the issuer reevaluated its controls over revenue including IT controls and concluded that material weaknesses existed that had not been previously identified. The issuer subsequently reflected these material weaknesses in a revision to its report on ICFR and the firm revised and reissued its report on the effectiveness of the issuer's ICFR to include these additional material weaknesses.

The issuer used multiple information-technology (IT) systems to initiate process and record transactions related to revenue and the related 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 these IT systems. ·The firm selected for testing controls over the issuer's monitoring of system changes. The firm did not identify and test any controls over the accuracy and completeness of certain reports that the issuer used in the operation of these controls. (AS 2201.39) In connection with our review the issuer reevaluated its controls over revenue including IT controls and concluded that material weaknesses existed that had not been previously identified. The issuer subsequently reflected these material weaknesses in a revision to its report on ICFR and the firm revised and reissued its report on the effectiveness of the issuer's ICFR to include these additional material weaknesses.

With respect to revenue and deferred revenue at certain business units that the firm subjected to more extensive audit procedures the following deficiencies were identified: The firm selected for testing two controls that consisted of the issuer's (1) identification of matters at its business units that could affect revenue recognition and (2) review of certain new and modified contracts for appropriate revenue recognition. The issuer used the matters identified in the first control as the population of contracts to be reviewed in the second control. The firm did not evaluate whether the first control was designed to address whether a complete population of these new and modified contracts was identified for review in the second control. (AS 2201.42) In connection with our review the issuer reevaluated its controls over revenue including IT controls and concluded that material weaknesses existed that had not been previously identified. The issuer subsequently reflected these material weaknesses in a revision to its report on ICFR and the firm revised and reissued its report on the effectiveness of the issuer's ICFR to include these additional material weaknesses.

The issuer recognized certain revenue and computed the related deferred revenue using an assumption that it developed from data obtained from external sources. The firm performed certain procedures to test this external data. The firm also performed a test of details on a sample of revenue transactions to test the occurrence of this revenue. The following deficiency was identified: · The firm did not perform sufficient procedures to test the relevance and reliability of the external data because it limited its procedures to (1) confirming the data with two of the external sources and (2) verifying that certain information was appropriately captured by certain of the external sources. (AS 1105.04 and.06) In connection with our review the firm determined that it would be unable to perform additional procedures to obtain sufficient appropriate audit evidence regarding the relevance and reliability of the external data and withdrew its report on the issuer's financial statements. Shortly after the firm withdrew its report the issuer withdrew its registration statement on Form F-1.

The issuer recognized certain revenue and computed the related deferred revenue using an assumption that it developed from data obtained from external sources. The firm performed certain procedures to test this external data. The firm also performed a test of details on a sample of revenue transactions to test the occurrence of this revenue. The following deficiency was identified: · The firm did not perform any procedures to test certain revenue transactions selected for testing. (AS 2301.08) In connection with our review the firm determined that it would be unable to perform additional procedures to obtain sufficient appropriate audit evidence regarding the relevance and reliability of the external data and withdrew its report on the issuer's financial statements. Shortly after the firm withdrew its report the issuer withdrew its registration statement on Form F-1.

The issuer used multiple IT systems to initiate process and/or record transactions related to certain revenue deferred revenue and long-lived 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 following deficiency 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)

With respect to change management: The firm selected for testing a change management control over certain IT systems that consisted of the documentation review testing and approval of changes prior to their migration into production. The firm did not perform procedures to test or test any controls over the completeness of the population of changes from which it made its selections for testing. (AS 1105.10)

As a result of the firm's ITGC testing deficiency discussed above the firm did not perform sufficient substantive procedures as follows: · The firm used certain system-generated data to substantively test deferred revenue long-lived assets and certain revenue but did not test or (as discussed above) sufficiently test controls over the accuracy and completeness of this data. (AS 1105.10)

As a result of the firm's ITGC testing deficiency discussed above the firm did not perform sufficient substantive procedures as follows: · The firm performed substantive analytical procedures as part of its testing of certain revenue and depreciation expense. The firm used certain system-generated data to develop its expectations but did not test or (as discussed above) sufficiently test controls over the accuracy and completeness of this data. (AS 2305.16)

As a result of the firm's ITGC testing deficiency discussed above the firm did not perform sufficient substantive procedures as follows: · The sample size the firm used in certain of its substantive procedures to test revenue and long-lived assets 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 due to the deficiency in the firm's control testing discussed above. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A)

The issuer entered into revenue arrangements with multiple elements and allocated the total consideration from these arrangements between the sale of products and services using its best estimate of selling price (“BESP”) under the relative-selling-price method. The issuer determined BESP based on contractual prices or factors of list prices. The firm selected for testing a control that consisted of reviews of the issuer's annual analysis of BESP. The firm did not determine whether the control owners' reviews of this analysis considered whether contractual prices or factors of list prices were the most appropriate selection for BESP. (AS 2201.42 and .44)

The firm did not perform any substantive procedures to test the issuer's assertion that contractual prices or factors of list prices were the most appropriate selection for BESP. (AS 2810.30)

The firm selected for testing a control that consisted of the review of all of the issuer's sales transactions including multiple-element arrangements for appropriate revenue recognition. The firm did not evaluate whether the control owners assessed whether prices for extended warranty services that were separately stated on customer invoices represented evidence that customers had the option to purchase these services for an expressly stated amount separate from the price of the product which may have affected the revenue allocation. (AS 2201.42 and .44)

The firm did not perform any substantive procedures to evaluate whether prices for extended warranty services that were separately stated on customer invoices represented evidence that customers had the option to purchase these services for an expressly stated amount separate from the price of the products. (AS 2810.30)

In response to ineffective IT general controls over the general ledger and revenue systems for one of its business units the issuer implemented and the firm selected for testing an annual control at year end that consisted of testing a sample of revenue transactions from the revenue system to determine whether revenue had been appropriately recognized. The following deficiencies were identified: · The firm did not identify that this annual control did not address the accuracy and completeness of the data and reports that were derived from the revenue system throughout the year and used in the operation of certain IT-dependent manual controls that the firm had selected for testing. (AS 2201.68)

In response to ineffective IT general controls over the general ledger and revenue systems for one of its business units the issuer implemented and the firm selected for testing an annual control at year end that consisted of testing a sample of revenue transactions from the revenue system to determine whether revenue had been appropriately recognized. The following deficiencies were identified: · The firm did not sufficiently test the annual control because the firm did not (1) evaluate whether the issuer's selection process resulted in all transactions having an opportunity of being selected and (2) test the control owner's procedures to determine whether revenue or deferred revenue had been appropriately recorded for certain items selected for testing. Further the firm did not identify and test any controls over the completeness of the reports derived from the revenue system that the control owner used to select transactions for testing. (AS 2201.68)

In response to ineffective IT general controls over the general ledger and revenue systems for one of its business units the issuer implemented and the firm selected for testing an annual control at year end that consisted of testing a sample of revenue transactions from the revenue system to determine whether revenue had been appropriately recognized. The following deficiencies were identified: · The firm did not identify and test any controls over the accuracy and completeness of the data derived from the general ledger system that were used in the operation of certain IT-dependent manual controls that the firm had selected for testing. (AS 2201.68)

In response to ineffective IT general controls over the general ledger and revenue systems for one of its business units the issuer implemented and the firm selected for testing an annual control at year end that consisted of testing a sample of revenue transactions from the revenue system to determine whether revenue had been appropriately recognized. The following deficiencies were identified: · The sample sizes the firm used in certain of its substantive procedures to test this revenue 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 issuer used an internally developed information-technology (IT) system to calculate the amount of revenue and the related deferred revenue to be recorded for certain revenue transactions. The following deficiencies were identified: · The firm selected for testing certain automated and IT-dependent manual controls over this revenue and the related deferred revenue. The firm's approach to testing these controls depended on effective IT general controls (ITGCs) including controls over change management. As a result of the deficiency in the firm's testing of the control discussed above the firm's testing of these automated and IT-dependent manual controls was not sufficient. (AS 2201.46)

The issuer used an internally developed information-technology (IT) system to calculate the amount of revenue and the related deferred revenue to be recorded for certain revenue transactions. The following deficiencies were identified: · The sample sizes the firm used in its substantive procedures to test this revenue and the related deferred revenue 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 recorded revenue as a result of a change in accounting estimate related to certain revenue that was previously deferred. The firm did not identify and evaluate the issuer's omission of disclosures related to this change in estimate that were required under FASB ASC Topic 250 Accounting Changes and Error Corrections. (AS 2810.30 and .31)

The issuer used an internally developed information-technology (IT) system to process certain revenue and the related deferred revenue. The firm selected for testing a control over change management for this revenue system but did not perform any procedures to determine whether the population of changes from which it made its selections for testing represented the complete population of changes made to this system. (AS 1105.10)

The firm selected for testing certain automated and IT-dependent manual controls over this revenue and the related deferred revenue. The firm's approach to testing these controls depended on effective IT general controls (ITGCs) including controls over change management. As a result of the deficiency in the firm's testing of the control discussed above the firm's testing of these automated and IT-dependent manual controls was not sufficient. (AS 2201.46)

The sample sizes the firm used in its substantive procedures to test this revenue and the related deferred revenue 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 issuer used an internally developed information-technology (IT) system to calculate the amount of revenue and the related deferred revenue to be recorded for certain revenue transactions. The following deficiencies were identified: · The firm selected for testing a control over change management for this revenue system but did not perform any procedures to determine whether the population of changes from which it made its selections for testing represented the complete population of changes made to this system. (AS 1105.10)