Explorer

The issuer reported intangible assets at several reporting units and evaluated them for impairment using undiscounted cash flow analyses. The firm's approach to test the issuer's impairment analyses was to test the issuer's process and develop an independent expectation of the undiscounted cash flows for each reporting unit. The following deficiency was identified: · The firm did not perform sufficient procedures to evaluate whether the method used by the issuer to develop the impairment analyses was in conformity with FASB ASC Topic 360 Property Plant and Equipment because it did not evaluate whether the carrying values of the reporting unit used by the issuer in its impairment analyses were consistent with the carrying values of the asset group as defined in FASB ASC Topic 360. (AS 2501.10)

The firm did not perform any procedures to evaluate whether the issuer tested non-amortizable intangible assets for impairment. (AS 2301.08)

The firm did not perform procedures to test certain intangible assets for impairment beyond comparing the book value of the assets to the corresponding revenue stream for the current year. (AS 2501.07)

The firm did not perform procedures to test or test any controls over the accuracy and completeness of the revenue streams used in its impairment testing of these intangible assets. (AS 1105.10)

The firm's internal inspection program had inspected this audit and reviewed this area but did not identify the deficiencies below. During the year the issuer identified indicators of impairment and performed a quantitative assessment of impairment. The firm did not perform procedures to evaluate the issuer's determination of the asset group used in its quantitative assessment. (AS 2301.08)

The firm's internal inspection program had inspected this audit and reviewed this area but did not identify the deficiencies below. During the year the issuer identified indicators of impairment and performed a quantitative assessment of impairment. The firm did not perform procedures beyond inquiry observing the issuer's implementation of certain assumptions and performing a sensitivity analysis to evaluate the reasonableness of the significant assumptions the issuer used in its quantitative assessment. (AS 2501.16)

The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. The issuer reported intangible assets and evaluated them for impairment using undiscounted cash flow analyses. The firm's approach to test the issuer's impairment analyses was to test the issuer's process. The firm did not perform procedures beyond inquiry to evaluate the reasonableness of significant assumptions related to the undiscounted cash flow projections used by the issuer to develop the impairment analyses. (AS 2501.16)

The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. The issuer reported intangible assets and evaluated them for impairment using undiscounted cash flow analyses. The firm's approach to test the issuer's impairment analyses was to test the issuer's process. The firm did not sufficiently evaluate whether the method used by the issuer to develop the impairment analyses was in conformity with GAAP as it did not evaluate whether the method was in conformity with certain applicable requirements of FASB ASC Topic 350 Intangibles—Goodwill and Other and FASB ASC Topic 360 Property Plant and Equipment. (AS 2501.10)

The firm selected for testing a control that consisted of the issuer's review of the assumptions used to estimate the fair value of certain acquired intangible assets for reasonableness. The firm did not evaluate the review procedures that the control owner 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)

The firm's approach for substantively testing these assets was to review and test management's process. The firm did not sufficiently evaluate the reasonableness of certain assumptions that the issuer used to value these assets because its procedures were limited to inquiring of management and performing a sensitivity analysis to determine whether changes to the assumptions would result in differences in excess of the firm's established materiality. (AS 2502.26 and .28)

The firm's approach for substantively testing these assets was to review and test management's process. The firm did not perform any substantive procedures to test another assumption. (AS 2502.26 and .28)

The issuer incurred costs related to certain intangible assets. The firm selected for testing a control that consisted of the issuer's review of such costs. The firm did not evaluate the specific review procedures that the control owners performed to assess the reasonableness of certain inputs and assumptions used in the valuation of such assets. (AS 2201.42 and .44)

The firm did not identify and evaluate that the method the issuer used to estimate the impairment of certain intangible assets was not in conformity with FASB ASC Topic 350. (AS 2810.30) Unrelated to our review the issuer reevaluated its accounting for these assets and concluded that misstatements existed that had not been previously identified. The issuer subsequently filed a Form 8-K indicating that its previously issued financial statements should not be relied on and corrected these misstatements in a subsequent filing.

The firm did not identify and evaluate that the issuer's omission of certain disclosures for assets measured at fair value on a nonrecurring basis was not in conformity with FASB ASC Topic 820 Fair Value Measurements. (AS 2810.30 and .31)

The firm did not perform sufficient procedures to evaluate the issuer's presentation of certain intangible assets as current assets because it did not evaluate the issuer's intent to consume all or a portion of these assets within one year from the balance sheet date. (AS 2301.08)

The firm did not perform sufficient procedures to evaluate the issuer's presentation of an investment and certain intangible assets as current assets because it did not evaluate the issuer's intent to consume all or a portion of these assets within one year from the balance sheet date. (AS 2301.08)

The issuer evaluated its intangible assets for possible impairment using various significant assumptions it developed based on the issuer's planned course of action. The firm did not sufficiently evaluate the reasonableness of these significant assumptions because it did not (1) evaluate whether the issuer had a reasonable basis for these assumptions and (2) take into account changes in conditions or events affecting the issuer. Further when evaluating the issuer's ability to carry out its planned course of action the firm performed a sensitivity analysis for these assumptions but did not evaluate the significant differences between the alternative assumptions it used in this analysis and the issuer's recent experience. (AS 2501.16 and .17)

The firm did not identify and evaluate that the method the issuer used to estimate the impairment of certain intangible assets was not in conformity with FASB ASC Topic 350 Intangible Assets Goodwill and Other. (AS 2810.30) Unrelated to our review the issuer reevaluated its accounting for these assets and concluded that material misstatements existed that had not been previously identified. The issuer subsequently filed a Form 8-K indicating that its previously issued financial statements should not be relied on and corrected these misstatements in a subsequent filing.

The issuer engaged a specialist to perform an assessment of an intangible asset for possible impairment. The firm's approach to substantively test this assessment was to test the issuer's process with the assistance of an auditor-employed specialist. The firm did not identify that the auditor-employed specialist did not perform procedures to evaluate the reasonableness of a significant assumption developed by the company's specialist. (AS 1105.A8b; AS 1201.C6 and .C7)

The firm did not perform any substantive procedures to test intangible assets for possible impairment. (AS 2301.08)

The issuer performed assessments of certain intangible assets for possible impairment using various significant assumptions. The firm's approach to evaluate these impairment assessments was to test the issuer's process. The firm did not perform procedures beyond inquiring of management to evaluate the reasonableness of certain significant assumptions used in these impairment assessments. (AS 2501.16)

During the year the issuer extended the useful lives of its intangible assets from their original lives. The issuer used a discounted cash flow analysis over the extended lives to evaluate its intangible assets for possible impairment. The firm did not perform sufficient procedures to evaluate the reasonableness of the sales projections because the firm did not perform procedures beyond inquiry to test the reasonableness of extending the useful lives. (AS 2502.26 and .28)

During the year the issuer extended the useful lives of its intangible assets from their original lives. The issuer used a discounted cash flow analysis over the extended lives to evaluate its intangible assets for possible impairment. The firm did not sufficiently evaluate the issuer's ability to achieve its forecasted sales projections in light of the substantial doubt about the issuer's ability to continue as a going concern because it limited its procedures to inquiry and comparing the forecasted sales projections to the current year results. (AS 2502.26 .28 .31 and .36)

The firm did not perform procedures to evaluate the issuer's conclusion that there were no indicators of potential impairment for intangible assets even though the firm was aware such conditions existed. (AS 2301.08; AS 2810.03)

The issuer reported intangible assets and performed an assessment of those assets for possible impairment. The principal auditor instructed the firm to perform procedures to test the valuation of these assets including an evaluation of indicators of impairment. The following deficiency was identified: • The firm did not perform procedures to evaluate whether the issuer had capitalized the costs associated with these intangible assets in accordance with IAS 38 Intangible Assets beyond inquiry of management and reading management's assessment of the intangible assets. (AS 2301.08 and .11)

The issuer reported intangible assets and performed an assessment of those assets for possible impairment. The principal auditor instructed the firm to perform procedures to test the valuation of these assets including an evaluation of indicators of impairment. The following deficiency was identified: • The firm did not perform procedures to test the impairment expense recorded by the issuer related to these intangible assets beyond inquiry of management. (AS 2501.07)

The issuer reported intangible assets and performed an assessment of those assets for possible impairment. The principal auditor instructed the firm to perform procedures to test the valuation of these assets including an evaluation of indicators of impairment. The following deficiency was identified: • The firm did not perform any procedures to evaluate how management determined whether any indicators of impairment existed with respect to these intangible assets at year end. (AS 2301.08 and .11)

The issuer identified certain impairment indicators and performed an assessment of intangible assets for impairment at year-end. The firm did not perform sufficient substantive procedures to evaluate the issuer's conclusions regarding these potential indicators of impairment as its procedures were limited to inquiry of management reading a memorandum and other information prepared by the issuer reviewing unsigned memoranda of understanding related to the intangible assets and obtaining legal confirmations regarding any potential litigation related to the intangible assets. Further although the firm identified a potential indicator that was excluded from the issuer's assessment the firm inappropriately concluded that it was not applicable and did not evaluate how the issuer considered it in its assessment. (AS 2301.08 and .11; AS 2810.03)

The firm did not perform procedures to evaluate the issuer's conclusion that there were no indicators of potential impairment related to its intangible assets even though the firm was aware that such conditions existed. (AS 2301.08; AS 2810.03)

The issuer's policy was to group long-lived assets including customer-relationship intangible assets together at the reportable segment level for purposes of evaluating its long-lived assets for possible impairment. The following deficiencies were identified: · The firm did not identify and test any controls over the determination of the issuer's asset groupings. (AS 2201.39)

The issuer's policy was to group long-lived assets including customer-relationship intangible assets together at the reportable segment level for purposes of evaluating its long-lived assets for possible impairment. The following deficiencies were identified: · The firm did not evaluate beyond reading the issuer's accounting policy whether the issuer's determination that the lowest level of identifiable and independent cash flows available were at the issuer's reportable segments level was in conformity with FASB ASC Subtopic 360-10 Property Plant and Equipment - Overall. (AS 2501.11; AS 2810.30)

The firm selected for testing a control that included the issuer's review of its disclosures related to revenue intangible assets and segment reporting. The firm did not identify and test any controls over the accuracy and completeness of the data and reports that the control owner used in the operation of this control for these disclosures. (AS 2201.39) In connection with our review the issuer reevaluated its controls over its disclosures 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 used certain of these data and reports in its substantive testing of these disclosures but did not perform any procedures to test or test any controls over the accuracy and completeness of these data and reports. (AS 1105.10) In connection with our review the issuer reevaluated its controls over its disclosures 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 selected for testing a control that consisted of the issuer's quarterly assessment of qualitative and quantitative factors to determine whether indicators of potential impairment of certain intangible assets existed. The firm did not identify that this control was not designed to identify and evaluate certain quantitative indicators of potential impairment. (AS 2201.42)

The issuer engaged a specialist to assist in its impairment analysis of its finite-lived intangible assets by determining the fair value of the assets. The firm did not evaluate the reasonableness of the assumptions used by the issuer-engaged specialist in determining the fair value of the assets. (AS 2502.26 and .28)

The issuer engaged a specialist to assist in its impairment analysis of its finite-lived intangible assets by determining the fair value of the assets. The firm did not test the cash flow projections the issuer provided to the issuer-engaged specialist. (AS 1210.12)

The issuer evaluated an intangible asset for possible impairment using various assumptions it developed including forecasted revenue that assumed significant growth. The firm did not perform any procedures beyond inquiring of management to evaluate the reasonableness of the significant revenue growth assumptions. (AS 2501.16)

During the year the issuer made purchases and sales of certain intangible assets and recognized the related activity in its statements of operations and cash flows. The firm did not perform substantive procedures to test these purchases and sales beyond obtaining issuer-produced reports. (AS 2301.08)

During the year the issuer acquired an intangible asset as part of a business combination. The issuer classified the intangible asset as finite-lived and began amortizing the intangible asset over its estimated useful life. The firm did not identify or appropriately address a departure from GAAP related to issuer's classification of the intangible asset as finite-lived and recording of amortization which was not in conformity with FASB ASC Topic 350 Intangibles—Goodwill and Other for this type of intangible asset. (AS 2810.30)

The issuer determined that it had a single cash-generating unit (“CGU”) for purposes of evaluating intangible and long-lived assets for possible impairment and used a discounted cash flow method to determine the recoverable amount of this CGU in its annual impairment analysis. The firm's approach for substantively testing the impairment of an intangible asset was to review and test the issuer's process. The following deficiency was identified: · The firm did not sufficiently evaluate whether the method the issuer used to determine the recoverable amount of the CGU was in conformity with the applicable financial reporting framework including the requirements of International Accounting Standard (IAS) 36 Impairment of Assets because it did not evaluate whether the issuer's use of a single CGU to evaluate the intangible asset for possible impairment was appropriate and in accordance with IAS 36. (AS 2501.10)

The issuer determined that it had a single cash-generating unit (“CGU”) for purposes of evaluating intangible and long-lived assets for possible impairment and used a discounted cash flow method to determine the recoverable amount of this CGU in its annual impairment analysis. The firm's approach for substantively testing the impairment of an intangible asset was to review and test the issuer's process. The following deficiency was identified: · The firm did not perform any procedures to evaluate the reasonableness of certain significant assumptions used by the issuer to determine the recoverable amount of the CGU including the Issuer's intent and ability to carry out those assumptions. (AS 2501.16 and .17)

The firm did not identify and evaluate a departure from IFRS related to an error in the issuer's disclosure of the intangible asset within its impairment footnote in accordance with IAS 1 Presentation of Financial Statements. (AS 2810.30 and .31)

To determine whether the intangible asset was impaired the issuer compared the asset's estimated undiscounted cash flows to its carrying value. The estimated cash flows were based on revenue projections that the issuer developed by weighting different categories of customers and estimating the sales price and number of units to be sold for each category. The firm compared the issuer's overall revenue projections and gross margin growth rates to those of several of the issuer's competitors. The firm did not evaluate the reasonableness of assumptions related to the weighting of customer categories and the number of units to be sold. Further the firm did not evaluate the reasonableness of the overall revenue projections and gross margin growth rates considering the decline in those rates for certain of the issuer's competitors. (AS 2501.09 .10 and .11; AS 2810.03)

The firm selected for testing a control that consisted of management's review of the impairment analysis for certain intangible assets. The firm did not evaluate the review procedures that the control owner 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)

The firm's approach for substantively testing the issuer's impairment analysis for certain intangible assets was to develop an independent expectation which included significant assumptions that were developed by the issuer and the firm. The following deficiencies were identified: · The firm did not perform sufficient procedures to evaluate the reasonableness of a certain significant assumption that was developed by the issuer because the firm did not (1) evaluate whether the issuer had a reasonable basis for this assumption and (2) take into account the issuer's intent and ability to carry out this assumption beyond performing inquiries of management and inspecting invoices. (AS 2501.16 and .17)

The firm's approach for substantively testing the issuer's impairment analysis for certain intangible assets was to develop an independent expectation which included significant assumptions that were developed by the issuer and the firm. The following deficiencies were identified: · The firm did not perform any procedures to demonstrate that it had a reasonable basis for a certain significant assumption that was developed by the firm including taking into account the requirements of certain elements of the applicable financial framework. (AS 2501.21 and .22)

The issuer acquired a business during the year and engaged an external specialist to determine the fair value of the intangible assets. The firm did not perform procedures to test the reasonableness of the issuer's forecasts used by the external specialist. (AS 1210.12)

During the year the issuer entered into agreements to jointly develop certain products and recorded the amounts paid in connection with these agreements as finite-lived intangible assets. The firm did not evaluate whether the issuer's capitalization of these costs met the requirements of FASB ASC Topic 730 Research and Development. (AS 2301.08)

During the year the issuer entered into agreements to jointly develop certain products and recorded the amounts paid in connection with these agreements as finite-lived intangible assets. The firm did not perform procedures beyond inquiry to test the useful life established for these assets. (AS 2501.07)

The issuer performed an impairment assessment of certain intangible assets. The firm did not perform procedures beyond obtaining and reading the issuer's sensitivity analysis to evaluate the reasonableness of the significant assumptions the issuer used in the impairment assessment. (AS 2501.16)