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The issuer recognized revenue from contracts that included multiple performance obligations and allocated the total transaction price to the separate performance obligations based on relative SSPs. The firm's approach for testing the allocation of revenue to the separate performance obligations was to test the issuer's process. The following deficiencies were identified: · The firm did not sufficiently evaluate whether the issuer had a reasonable basis for the SSP of a performance obligation for certain transactions. (AS 2501.16)

The issuer recognized revenue using certain inputs and assumptions to measure its progress toward the completion of its performance obligations. The firm's approach for substantively testing the estimate of progress toward completion was to review and test management's process. The firm did not perform procedures to test the assumptions the issuer used to determine the estimate. (AS 2501.09 .10 and .11)

The issuer recognized certain revenue from contracts using a measure of progress method. The following deficiencies were identified: · For certain of this revenue at another business unit the firm did not obtain sufficient appropriate audit evidence regarding the accuracy of estimated total units to be completed. (AS1105.10; AS 2501.11)

The firm's substantive procedures to test the issuer's disclosure related to remaining performance obligations included selecting a sample of contracts for testing. For certain of these contracts the firm did not perform procedures to evaluate the reasonableness of a significant assumption used by the issuer to develop this disclosure. (AS 2501.16)

For certain contracts the issuer recognized revenue over time based on costs incurred to date relative to total estimated costs to complete. The firm did not perform procedures to evaluate the reasonableness of the significant assumptions that the issuer used to develop the estimated costs to complete the open contracts the firm selected for testing. (AS 2501.16)

The firm's internal inspection program inspected this audit and reviewed this area but did not identify certain of the deficiency below. For another type of revenue that included an estimate of variable consideration in the transaction price the following deficiency was identified: · The firm's approach for substantively testing this estimate was to test the issuer's process. The firm did not evaluate the reasonableness of certain of the significant assumptions that the issuer used to determine this estimate. (AS 2501.16)

The issuer recognized revenue from customer contracts over time based on costs incurred to date relative to total estimated costs to complete the contracts. For certain of these contracts that were selected for testing the firm did not evaluate the reasonableness of the estimated costs to complete beyond (1) comparing for each contract the estimated costs to complete at year end to the estimated costs to complete at the subsequent month end and (2) inquiring of management. (AS 2501.07)

The firm's approach for substantively testing certain revenue was to test the issuer's process. To substantively test this revenue the firm performed tests of details over a sample of revenue transactions including recalculating the revenue and deferred revenue for the selected transactions. The following deficiency was identified: • The firm did not evaluate the reasonableness of a significant assumption used to estimate the amount of revenue to recognize. (AS 2501.16)

The component recognized revenue from a variety of sources. The following deficiencies were identified: · The firm did not sufficiently evaluate whether certain revenue was appropriately recognized because the firm did not perform procedures to test various factors and assumptions used by the issuer beyond inquiring of management inspecting internally-generated customer invoices (for certain revenue) and recalculating the revenue recognized. (AS 2301.08 and .13; AS 2501.09 .10 and .11)

The issuer recorded certain acquired intangible assets inventory and fixed assets. The firm did not test certain assumptions used by external specialists to estimate the fair values of the acquired intangible assets and inventory. (AS 2502.26 and .28)

The firm did not perform procedures to evaluate the reasonableness of a significant assumption used by the issuer to estimate the amount of revenue to recognize for certain sales agreements beyond inquiry of management. (AS 2501.16)

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 estimated standalone selling prices were based on the expected cost plus a margin approach which included significant assumptions related to the expected costs of satisfying each of the performance obligations. The following deficiencies were identified: · The firm's approach for substantively testing the estimated standalone selling prices was to test the issuer's process. The firm did not perform procedures to evaluate the reasonableness of the expected costs of satisfying each of the performance obligations. (AS 2501.16)

The issuer recognized certain of its revenue from contracts using the percentage-of-completion method. While the firm performed certain procedures that provided some evidence about historical margins on contracts these procedures provided little to no evidence regarding the estimated costs to complete the specific contracts open at year end. (AS 2501.07)

The firm's approach for substantively testing the sales returns reserve was to review and test management's process. The firm did not sufficiently evaluate the reasonableness of this reserve because the firm did not test beyond inquiry of management the adjustments that the issuer made to this reserve. (AS 2501.09 .10 and .11)

The issuer recognized certain revenue upon shipment of its products to distributors and estimated an accrual for rebates it had not yet paid based on a rolling average of actual rebates paid in previous months. The following deficiencies were identified: · The firm did not identify and test any controls that addressed the reasonableness of the assumptions the issuer used to estimate this accrual. (AS 2201.39)

The issuer recognized certain revenue upon shipment of its products to distributors and estimated an accrual for rebates it had not yet paid based on a rolling average of actual rebates paid in previous months. The following deficiencies were identified: · The firm's approach for substantively testing the rebate accrual was to review and test management's process. The firm did not sufficiently evaluate the reasonableness of the rebate accrual because the firm did not test beyond inquiry of management whether the time period that the issuer used to calculate the rolling average was reasonable. (AS 2501.09 .10 and .11)

The issuer recognized certain of its revenue from customer contracts based on costs incurred to date relative to total estimated costs to complete these contracts. The issuer used certain significant assumptions to estimate the costs to complete these contracts. The following deficiencies were identified: · The firm did not perform any substantive procedures to evaluate the reasonableness of these significant assumptions. (AS 2501.16)

The firm's internal inspection program inspected this audit and reviewed one of these areas but did not identify the deficiencies below. The issuer recognized revenue from contracts that included multiple performance obligations and allocated the total transaction price to the separate performance obligations based on relative standalone selling prices (SSPs). The issuer used various methods to determine the SSPs for each of the performance obligations. The firm did not evaluate certain evidence that suggested that the issuer's methods to determine the SSPs and the resulting allocation of the transaction price to the separate performance obligations may not be appropriate. (AS 2501.10; AS 2810.03)

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 following deficiencies were identified: · The firm's approach for substantively testing the estimated standalone selling prices was to test the issuer's process. The firm selected a sample of revenue arrangements for testing but did not perform procedures to evaluate the reasonableness of certain significant assumptions used to develop the standalone selling prices beyond performing a sensitivity analysis for certain revenue arrangements selected for testing. (AS 2501.16)

The issuer recognized certain revenue based on its estimated progress toward complete satisfaction of the performance obligations. The firm did not perform procedures to test this revenue beyond selecting a sample of revenue transactions and vouching them to contracts and invoices. (AS 2501.07)

The firm did not evaluate whether the method used by the issuer to recognize estimated revenue was in conformity with certain requirements of FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2501.10)

The firm selected for testing a control over certain revenue that consisted of a comparison by contract of actual profit to forecasted amounts. The firm did not identify and test any controls over the data and assumptions used to develop the forecasted profits that were used in the performance of this control. (AS 2201.39)

The issuer entered into contracts with customers at certain of its locations that required revenue to be recognized over time based on costs incurred to date relative to total estimated costs to complete these contracts. For the two locations discussed above the firm did not evaluate the reasonableness of the estimated costs to complete for contracts open at year end beyond (1) comparing in the aggregate for all contracts estimated costs to complete at year end to the estimated costs at the subsequent month end and (2) comparing the gross margin for certain contracts completed during the year to the initial estimated margin for these contracts. (AS 2501.07)

The issuer entered into contracts with certain customers that required revenue to be recognized over time based on costs incurred to date relative to total estimated costs to complete these contracts. The following deficiencies were identified: · The firm's approach for substantively testing this revenue was to review and test management's process. The firm did not sufficiently evaluate the reasonableness of certain significant assumptions that management used as inputs into its revenue recognition model because its procedures were limited to inquiring of management and performing a retrospective review to determine whether prior projections were consistent with actual results. (AS 2501.09 .10 and .11) [This citation refers to AS 2501 Auditing Accounting Estimates which was in effect for this audit. This standard was replaced by AS 2501 Auditing Accounting Estimates Including Fair Value Measurements which became effective for audits of financial statements for fiscal years ending on or after December 15 2020.]

The issuer recognized certain revenue over time based on labor costs incurred to date relative to total estimated labor costs to complete the contract. The following deficiencies were identified: · For projects designated as in-process the firm did not sufficiently evaluate the reasonableness of the issuer's significant assumption related to total estimated labor hours because it did not evaluate significant differences between this assumption and the issuer's recent experience. (AS 2501.16)

The issuer recorded certain revenue net of allowances for contractual adjustments. The firm's procedures to test the estimated portion of these contractual adjustments consisted of (1) developing an independent expectation (2) testing the issuer's process and (3) evaluating transactions occurring after the measurement date. The following deficiencies were identified: · When developing its independent expectation the firm did not perform procedures beyond inquiry to demonstrate it had a reasonable basis for a certain assumption it independently derived. (AS 2501.22)

The issuer recognized revenue from certain contracts over time by estimating its progress toward completion. The firm did not perform procedures to test this revenue beyond inspecting the contract and inquiring of project managers for a sample of contracts. (AS 2501.07)

The following deficiency was identified with respect to the firm's substantive testing of revenue: · For certain revenue the firm did not perform any procedures to evaluate the reasonableness of certain significant assumptions used by the issuer in its estimate of revenue recognition. (AS 2501.16)

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 following deficiencies were identified: · The firm did not perform any substantive procedures to evaluate the reasonableness of the significant assumptions the issuer used to estimate standalone selling prices. (AS 2501.16)

The issuer recognized certain revenue based on the issuer's estimate of the number of customers enrolled in plans under which the issuer provided services. The firm did not sufficiently evaluate whether the issuer had a reasonable basis for this significant assumption because it did not evaluate the relevance of certain historical customer data that the issuer adjusted and used to develop this significant assumption. (AS 1105.04 and .06; AS 2501.16)

The issuer recognized certain revenue over time based on costs incurred to date relative to total estimated costs to complete the contract. The firm did not perform any procedures beyond inquiring of management to evaluate the reasonableness of the significant assumptions that the issuer used to develop the estimated costs to complete the contracts the firm selected for testing. (AS 2501.16)

The issuer recognized certain revenue over time based on costs incurred to date relative to total estimated costs to complete the contract. The following deficiencies were identified: · The firm did not perform any procedures beyond inquiring of project managers to evaluate the reasonableness of the significant assumptions that the issuer used to develop the estimated costs to complete the contracts the firm selected for testing. (AS 2501.16)

The issuer recognized certain revenue over time based on costs incurred to date relative to total estimated costs to complete the contract. The firm did not perform any procedures beyond inquiring of management to evaluate the reasonableness of the significant assumptions that the issuer used to develop the estimated costs to complete the contracts the firm selected for testing. (AS 2501.16)

The issuer recognized revenue from certain contracts over time based on estimated costs incurred relative to total estimated costs to complete the contract. The firm did not evaluate the reasonableness of the significant standard cost assumption that the issuer used to develop the estimated costs incurred on and the estimated costs to complete the contracts the firm selected for testing. (AS 2501.16)

The issuer's revenue included revenue recognized from contracts over time based on hours incurred to date relative to total estimated hours to complete. The following deficiency was identified: · The firm did not perform procedures to test disclosures related to performance obligations expected to be recognized at year end and the periods over which the issuer expects to recognize those amounts beyond obtaining issuer-produced reports. (AS 2501.07)

The issuer's revenue included revenue recognized from contracts over time based on hours incurred to date relative to total estimated hours to complete. The following deficiency was identified: · The firm did not perform procedures beyond inquiry of management to evaluate the reasonableness of significant assumptions related to estimated hours to complete. (AS 2501.16)

The issuer used multiple point-of-sale (POS) applications to initiate and process revenue transactions. The firm selected for testing two controls related to the automated calculation of sales discounts and the review of those discounts by designated individuals with certain access levels. The firm's primary substantive procedures to test franchise royalty revenue were analytical procedures. The following deficiency was identified: • The firm did not perform procedures to determine whether certain assumptions it used in developing its expectation for revenue were based on predictable relationships. (AS 2305.13 and .14)

The issuer recognized revenue from certain contracts over time based on costs incurred to date relative to total estimated costs to complete. The firm did not perform any substantive procedures to evaluate the reasonableness of the significant assumptions that the issuer used to develop the estimated costs to complete the contracts that the firm selected for testing. (AS 2501.16)

The issuer recognized revenue from a contract over time based on costs incurred to date relative to total estimated costs to complete. The firm did not perform any substantive procedures to evaluate the reasonableness of the significant assumptions that the issuer used to develop the estimated costs to complete this contract beyond inquiring of project managers. (AS 2501.16)

The issuer recognized certain revenue over time based on costs incurred to date relative to total estimated costs to complete the contract. The firm did not perform any substantive procedures to evaluate the reasonableness of a significant assumption that the issuer used to develop the estimated total costs to complete the contracts. (AS 2501.16)