Explorer

The issuer recognized revenue from certain arrangements as single performance obligations satisfied over time on a straight-line basis. The firm selected a sample of these arrangements for testing. The following deficiencies were identified: · The firm did not perform substantive procedures to evaluate whether recognizing revenue for multiple services as a single performance obligation recognized over time on a straight-line basis was in conformity with FASB ASC Topic 606 beyond reading an issuer-prepared memorandum. (AS 2301.08 and .13)

For revenue at one of these five business units the following additional deficiencies were identified: · The firm did not identify and evaluate the issuer's omission of certain required disclosures related to this revenue. (AS 2810.30 and .31)

For a second type of revenue the firm did not evaluate whether revenue was recognized in conformity with certain relevant requirements of FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2301.08 and .13)

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 complete the firm did not perform sufficient procedures to evaluate whether the method used by the issuer to record revenue was in conformity with FASB ASC Topic 606 because it did not evaluate (1) whether the performance obligations were satisfied and (2) certain evidence that suggested these projects were not complete. (AS 2501.10; AS 2810.03)

The firm did not identify and evaluate the issuer's omission of certain disclosures required under FASB ASC Topic 606. (AS 2810.30 and .31)

The firm did not identify and evaluate the issuer's omission of certain disclosures required under FASB ASC Topic 606. (AS 2810.30 and .31)

The issuer recognized revenue from certain arrangements as single performance obligations satisfied at a point in time. The firm selected a sample of these revenue transactions for testing. The following deficiencies were identified: · The firm did not perform sufficient procedures to evaluate whether the issuer recognized revenue in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers because it did not evaluate (1) the issuer's identification of the customers in these arrangements and (2) whether the issuer was acting as a principal or as an agent. (AS 2301.08 and .13)

The firm did not identify and evaluate the issuer's omission of certain disclosures required under FASB ASC Topic 606 related to a description of the nature of certain services the issuer promised to transfer. (AS 2810.30 and .31)

The firm did not identify and evaluate the issuer's omission of a required disclosure under FASB ASC Topic 606 related to significant payment terms. (AS 2810.30 and .31)

The issuer recognized revenue from contracts with customers that included an estimate of variable consideration in the transaction price; the issuer estimated this variable consideration using a portfolio of contracts approach. The following deficiencies were identified: · The firm did not evaluate whether the issuer's method to estimate variable consideration was in conformity with FASB ASC Topic 606 and appropriate for the nature of the revenue. (AS 2501.10)

The firm did not identify and evaluate the issuer's omission of certain disclosures required under FASB ASC Topic 606 related to revenue that is recognized over time. (AS 2810.30 and .31)

The firm did not identify and evaluate the significance to the financial statements of the issuer's omission of disclosures required by FASB ASC Topic 606 Revenue from Contracts with Customers regarding transition and performance obligation information. (AS 2810.30 and .31)

The issuer recognized certain revenue upon shipment of its products to distributors. Certain contracts for this revenue included provisions for customer pricing rebates. The firm did not identify and evaluate the significance to the issuer's financial statements of departures from GAAP related to (1) the issuer not considering the rebates in estimating at the time revenue was recognized the amount of consideration to which it was entitled in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers and (2) the issuer's disclosures inaccurately stating that customer pricing rebates were recorded as a reduction of revenue in the same period the related sales were recorded. (AS 2810.30 and .31)

Certain of the issuer's revenue arrangements included multiple performance obligations. The issuer recognized revenue from certain contracts as either single performance obligations or multiple performance obligations satisfied at a point in time. The firm's substantive procedures to test revenue consisted of selecting a sample of transactions for testing. The following deficiency was identified: • The firm did not perform any substantive procedures to evaluate the issuer's contract terms with its customers to determine whether the issuer recognized revenue in conformity with FASB ASC Topic 606 Revenues from Contracts with Customers. (AS 2301.08 and .13)

The firm did not identify and evaluate a departure from IFRS related to the issuer's recognition of revenue from contract modifications under IFRS 15 Revenue from Contracts with Customers. (AS 2810.30 and .31)

The issuer recognized certain other revenue pursuant to a contract with an external party through which it agreed to provide services in exchange for noncash consideration. The firm did not perform procedures to evaluate whether the issuer recognized this revenue in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2301.08 and .13)

The firm did not perform any substantive procedures to evaluate whether the issuer recognized revenue in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2301.08 and .13)

The firm did not identify and evaluate the issuer's omission of certain required disclosures under FASB ASC Topic 606 Revenue from Contracts with Customers related to the method used to recognize revenue for one type of revenue. (AS 2810.30 and .31)

The firm did not perform any substantive procedures to evaluate whether the issuer recognized revenue in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2301.08 and .13)

The firm did not perform any substantive procedures to evaluate whether the issuer recognized revenue in conformity with FASB ASC Topic 606. (AS 2301.08 and .13)

The firm did not evaluate the completeness of the issuer's revenue disclosures required by FASB ASC Topic 606. (AS 2301.08)

The firm did not perform procedures to evaluate whether certain other revenue was recognized in conformity with the applicable accounting standard beyond reading the issuer's revenue recognition policy. (AS 2301.08)

The issuer recognized certain revenue from product sales to customers. For certain customers the firm did not evaluate if it was probable that the issuer would collect substantially all of the consideration to which it believes it is entitled in order to recognize revenue in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers. Further the firm did not evaluate whether the timing of customer payments indicated the existence of implicit payment terms that would affect the recognition of revenue in conformity with FASB ASC Topic 606. (AS 2810.30)

The issuer recognizes revenues from product sales. The firm did not test whether the issuer had evaluated if the issuer and customers had approved the contracts and were committed to perform their respective obligations in conformity with FASB ASC Topic 606. (AS 2810.30)

For one of its business units the issuer entered into revenue arrangements with multiple performance obligations and allocated the total transaction price for each arrangement to the separate performance obligations on a relative standalone selling price basis. The following deficiencies were identified: · The firm did not identify and test any controls that addressed whether the issuer's allocation of revenue to separate performance obligations was based on relative standalone selling prices in conformity with FASB ASC Topic 606. (AS 2201.39)

For one of its business units the issuer entered into revenue arrangements with multiple performance obligations and allocated the total transaction price for each arrangement to the separate performance obligations on a relative standalone selling price basis. The following deficiencies were identified: · The firm did not perform any substantive procedures to evaluate whether the issuer's allocation of revenue to separate performance obligations was based on relative standalone selling prices in conformity with FASB ASC Topic 606. (AS 2810.30)

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 evaluate whether the methods that the issuer used to estimate the standalone selling prices maximized the use of observable inputs in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2501.10)

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 evaluate whether the methods that the issuer used to determine the effect of changes in the transaction price after contract inception were in conformity with FASB ASC Topic 606 beyond observing that certain changes were approved. (AS 2501.10)

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 an expected cost plus a margin approach that involved significant assumptions. The following deficiencies were identified: · For certain contracts the issuer recognized revenue over time using an output method to measure its progress toward completion of its performance obligations. The firm did not evaluate whether this method was in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2501.10) In connection with our review the issuer reevaluated its accounting for these arrangements and concluded that misstatements existed that had not been previously identified. The issuer subsequently filed a Form 8-K disclosing that its previously issued financial statements should no longer be relied upon and that it plans on restating its financial statements to correct these misstatements.

In performing its substantive procedures of the issuer's revenue the firm did not sufficiently evaluate whether (1) the issuer's arrangements with a third party represented a contract with an identifiable customer and (2) the issuer's performance obligations should be evaluated jointly or separately in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers ('ASC 606'). (AS 2810.30)

The firm did not sufficiently evaluate whether the issuer recognized revenue in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers because it limited its procedures to verifying that the issuer received cash or that cash received agreed to a sales contract. (AS 2810.30)

The firm's internal inspection program inspected this audit and reviewed certain of these areas but did not identify the deficiencies below. The firm did not identify and evaluate departures from GAAP related to the issuer's omission of certain disclosures related to revenue that were required by FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2810.30 and .31)

The firm did not perform sufficient procedures to evaluate whether the issuer's recognition of certain revenue was in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers because the firm did not evaluate certain requirements of FASB ASC Topic 606. (AS 2301.08)

The firm did not identify and evaluate a departure from GAAP related to the issuer's omission of certain disclosures related to this revenue as required by FASB ASC Topic 606. (AS 2810.30 and .31)

The firm did not evaluate whether certain revenue recognition criteria had been met in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2810.30)

The firm did not identify and appropriately address a departure from GAAP related to the issuer's disclosures about its revenue recognition policy. (AS 2810.30 and .31)

The firm did not identify and evaluate the significance to the financial statements of a GAAP departure related to the omission of required disclosures under FASB ASC Subtopic 606-10-50 Revenue from Contracts with Customers— Overall — Disclosure and ASC Subtopic 235-10-50 Notes to Financial Statements — Overall — Disclosure including an accounting policy disclosure. (AS 2810.30 and .31)

The issuer's revenue included equipment leases. The firm did not perform any procedures to evaluate whether elements of these leases should have been accounted for as sales-type leases in conformity with FASB ASC Topic 842 Leases. (AS 2810.30)

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

The firm did not perform sufficient procedures to evaluate whether the issuer recognized certain revenue in conformity with IFRS 15 Revenue from Contracts with Customers because it did not evaluate (1) whether a series of contracted services provided to the customer constituted separate performance obligations and (2) the effect of variable consideration on the issuer's determination of the transaction price. (AS 2810.30)

The firm did not perform procedures to evaluate whether the issuer's revenue recognition was in conformity with GAAP. (AS 2810.30)

The firm did not identify and evaluate the significance to the financial statements of the issuer's omission of certain disclosures required by GAAP. (AS 2810.30 and .31)

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 did not identify and evaluate a departure from GAAP related to the issuer's omission of certain disclosures required by FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2810.30 and 31)

The issuer recognized certain revenue from transactions with related parties. The firm did not identify and appropriately address a departure from GAAP related to the issuer's omission of a disclosure required by FASB ASC Topic 850 Related Party Disclosures related to this revenue. (AS 2810.30 and .31)

The firm did not identify and appropriately address a departure from GAAP related to the issuer recognizing certain revenue that did not reflect consideration promised in a contract in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2810.30)

For other types of revenue the firm did not sufficiently evaluate whether the revenue was appropriately recognized in conformity with ASC Topic 606 because it limited its procedures to verifying that the issuer received cash for recognized revenue. (AS 2810.30)

The firm did not test whether the issuer appropriately identified and satisfied performance obligations prior to recognizing revenue in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2810.30)

The firm did not identify and appropriately address the issuer's omission of certain disclosures required by FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2810.30 and .31)

The issuer recognized certain revenue based on an arrangement with an external party. The firm did not perform any procedures to evaluate whether the issuer's arrangement represented a contract with an identifiable customer in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2301.08 and .13)

The firm did not perform any procedures to evaluate whether the issuer's recognition of certain revenue was in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2301.08 and .13)