Explorer

The firm did not perform any procedures to test the reasonableness of the fair value of certain assets or the tax basis of certain assets and liabilities used in the issuer's external specialist's study that the issuer used to adjust the valuation of certain deferred tax assets. (AS 2501.11)

The firm did not identify and test any controls related to the issuer's evaluation of the potential effects of changes in tax rates tax laws and accounting standards. (AS 2201.39)

The firm's internal inspection program had inspected this audit reviewed these areas and also identified the deficiencies below. The firm selected for testing a control that consisted of the issuer's review of the valuation of deferred tax assets. The firm did not identify and test any controls over the review of forecasted financial information used in the operation of this control. (AS 2201.39)

The firm did not identify and test any controls over the determination and valuation of certain deferred tax assets. (AS 2201.39) Unrelated to our review the issuer reevaluated its accounting for income taxes and concluded that a material misstatement existed that had not been previously identified. The issuer subsequently corrected this misstatement in a restatement of its financial statements and the firm revised and reissued its report on the financial statements. The issuer also reevaluated its controls over income taxes and concluded that a material weakness existed that had not been previously identified. The issuer subsequently reflected this material weakness in a revision to its report on ICFR and the firm revised its opinion on the effectiveness of the issuer's ICFR to express an adverse opinion and reissued its report.

The issuer recorded a partial valuation allowance against recorded deferred tax assets based on an estimate of forecasted taxable income that included the expected sale of a certain asset. The firm did not evaluate whether the issuer considered all available evidence both positive and negative and the reasonableness of the issuer's weighting of that evidence as it related to the valuation of the asset held for sale. (AS 2501.11) Unrelated to our review the issuer reevaluated its accounting for the income tax provision and concluded that a material misstatement existed that had not been previously identified. The issuer subsequently restated its financial statements to correct this and other material misstatements and the firm revised and reissued its report on the financial statements. The issuer also reevaluated its controls over the income tax provision 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 other material weaknesses discussed herein and the firm modified its opinion on the effectiveness of the issuer's ICFR to express an adverse opinion and reissued its report.

During the year the issuer completed a restructuring of its foreign subsidiaries. The following deficiencies were identified: · The firm did not identify and test any controls over the issuer's evaluation of the tax considerations related to this restructuring. (AS 2201.39)

During the year certain changes in federal tax laws affected the issuer's determination of its state and local taxes. The firm did not identify and test any controls over the issuer's evaluation of the effects of these changes on its state and local taxes. (AS 2201.39)

The firm did not identify and test any controls that addressed whether the issuer's calculations of certain limitations on deductions used to determine income tax expense were appropriate. Further the firm did not identify and test any controls over the issuer's evaluation of the base erosion and anti-abuse tax ('BEAT'). (AS 2201.39)