Explorer

The firm did not identify and test any controls over the accuracy and completeness of information used by the issuer in the operation of certain controls. (AS 2201.39)

The firm did not perform any substantive procedures to test or in the alternative test any controls over the accuracy and completeness of information used in the firm's testing of certain controls. (AS 1105.10)

The firm's substantive analytical procedures over revenue were insufficient because: · The firm used certain system-generated sales data in its substantive analytical procedures but did not perform any procedures to test or test any controls over the accuracy and completeness of the data. (AS 2305.16)

For certain revenue the firm selected for testing an automated control within the general ledger system that was designed to generate invoices and recognize revenue once the shipment was confirmed in the general ledger system. The firm did not identify and test any controls over (1) confirmed shipment data that were manually entered into the general ledger system and (2) the completeness and accuracy of the shipment data transferred to the general ledger from the issuer's shipping tracking systems. (AS 2201.39)

For a third type of revenue consisting of three categories the following deficiencies were identified: · For one of these two categories of this revenue the issuer used external parties to provide the service for the issuer's customer. The firm selected for testing a control that included the issuer obtaining delivery reports from the external parties as evidence that the performance obligation was met. The firm did not identify and test any controls over the accuracy and completeness of certain of these reports. (AS 2201.39) Unrelated to our review the issuer reevaluated its controls over revenue 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.

The issuer offered various forms of sales incentives to customers that were recorded as a reduction of revenue with a corresponding liability for sales incentives earned but not yet settled. The following deficiencies were identified: · The firm did not perform sufficient substantive procedures to identify and evaluate the issuer's sales incentive programs because the firm's procedures consisted of (1) inquiring of certain issuer personnel about the population of sales incentives; (2) performing analytical procedures which as designed did not provide sufficient appropriate audit evidence; and (3) selecting a sample of the issuer's sales incentive programs and tracing them to the issuer's sales incentive accrual without performing any procedures to test the accuracy and completeness of the population of sales incentive programs from which the sample was selected. (AS 2301.08)

With respect to the firm's substantive testing of one type of revenue the firm did not perform any procedures to test or in the alternative test any controls that addressed the accuracy and completeness of certain system-generated reports used in its testing. (AS 1105.10)

The firm did not perform any substantive procedures to test or sufficiently test controls over the accuracy and completeness of certain data that it used in its substantive testing of the sales returns and sales incentive reserves. (AS 1105.10; AS 2501.11)

The firm used reports generated or maintained by the IT system discussed above in performing certain of its substantive procedures to test revenue. The firm did not perform any substantive procedures to test or (as a result of the compensating control testing deficiency) sufficiently test controls over the accuracy and completeness of these reports. (AS 1105.10)

The firm selected for testing a control that consisted of the issuer's review of the calculation of the sales returns reserve. As the compensating control did not address certain customers the firm did not sufficiently test controls over the accuracy and completeness of certain customer data that were used in the operation of this control. (AS 2201.46)

The issuer recognized revenue based on inputs that included billing rates and labor hours incurred. The firm used certain labor hour information in its substantive testing of revenue. The firm did not perform any procedures to test or test any controls over the accuracy and completeness of this information. (AS 1105.10)

For two business units the firm selected for testing two controls that included the issuer's review of the accuracy of pricing information used to record revenue. The firm did not identify and test any controls over the accuracy and completeness of certain pricing information that the control owners used in the operation of these controls. (AS 2201.39)

The firm's substantive procedures to test certain of the issuer's revenue disclosures consisted of tracing the amounts disclosed to schedules prepared by the issuer. The firm did not perform any procedures to test or test any controls over the accuracy and completeness of these issuer-prepared schedules. (AS 1105.10)

The firm's substantive procedures to test certain of the issuer's revenue disclosures consisted of tracing the amounts disclosed to schedules prepared by the issuer. The firm did not perform any procedures to test or test any controls over the accuracy and completeness of these issuer-prepared schedules. (AS 1105.10)

The firm used an issuer-prepared schedule in its substantive testing of one of the issuer's revenue disclosures but did not perform any procedures to test or test any controls over the accuracy of this schedule. (AS 1105.10)

The firm used an issuer-prepared schedule in its substantive testing of certain of the issuer's revenue disclosures but did not perform any procedures to test or test any controls over the accuracy of this schedule. (AS 1105.10)

The issuer identified segregation of duties conflicts related to individuals who had the ability to both develop and implement changes to this system and implemented controls to monitor these conflicts. The firm did not identify and test any controls over the accuracy and completeness of the reports generated by the tool that the control owners used in the operation of these controls. (AS 2201.39)

With respect to the issuer's revenue disclosures the following deficiencies were identified: · The firm selected for testing a control that included the issuer's review of certain revenue disclosures but did not test the aspect of the control that addressed the accuracy and completeness of the issuer-prepared schedules used to prepare these disclosures. (AS 2201.42 and .44)

With respect to the issuer's revenue disclosures the following deficiencies were identified: · The firm used these issuer-prepared schedules in its substantive testing of these revenue disclosures but did not perform any procedures to test or sufficiently test controls over the accuracy and completeness of these schedules. (AS 1105.10)

With respect to certain of the issuer's disclosures related to revenue the following deficiencies were identified: · The firm selected for testing a control that included the issuer's review of its financial statement disclosures. The firm did not identify and test any controls over the accuracy and completeness of certain issuer-prepared schedules related to revenue that the control owners used in the operation of this control. (AS 2201.39)

With respect to certain of the issuer's disclosures related to revenue the following deficiencies were identified: · The firm used these issuer-prepared schedules in its substantive testing of these revenue disclosures but did not perform any procedures to test or test any controls over the accuracy and completeness of these schedules. (AS 1105.10)

The firm did not perform any procedures to test or in the alternative identify and test any controls over the accuracy and completeness of information produced by the issuer that the firm used in its substantive procedures to test certain revenue. (AS 1105.10)

The issuer used an external party to assist in selling its products. In addition the issuer's license to sell certain products expired during the year. The following deficiencies were identified: · The firm did not perform any procedures to test or test any controls over the accuracy and completeness of information produced by the issuer that the firm used in its substantive procedures. (AS 1105.10)

The firm did not perform any procedures to test or test controls over the accuracy and completeness of certain system-generated data that it used to test certain revenue. (AS 1105.10)

The issuer recognized revenue from multiple business entities. The following deficiencies were identified: · The firm did not test or identify and test any controls over the completeness of a system-generated report used in its substantive procedures to test revenue for this business entity. (AS 1105.10)

The issuer reported revenue from multiple sources. For one source of revenue the firm did not test or in the alternative test any controls over the accuracy and completeness of data used by the issuer to calculate the revenue. (AS 1105.10)

The firm selected for testing certain controls over revenue that consisted of (1) the reconciliation of billing data from a system-generated report from the issuer's general ledger system to the issuer's billing system and (2) management's review of certain unresolved reconciling items from the reconciliation of data from another system to the issuer's billing system. The firm did not identify and test any controls over the accuracy and completeness of the data used in the operation of these controls. (AS 2201.39)

To reduce the extent of its substantive procedures for certain revenue the firm tested and placed reliance on controls. The following deficiencies were identified: · The firm selected for testing an IT dependent manual control over this revenue that consisted of management's review of the reconciliation of certain revenue transactions between two systems. The firm did not identify and test any controls over the accuracy and completeness of the system-generated information used in the operation of this control. (AS 2301.16)

The issuer recognized certain revenue upon delivery of the sold product to the customer. Pursuant to the customer contracts the quantity of products sold and delivered was measured using measuring equipment at the issuer's locations. The following deficiency was identified: · The firm selected for testing another control that consisted of management's review of the reconciliation of the quantity of products sold in the revenue system to the quantity of products delivered in the issuer's inventory management system. The firm did not identify and test any controls over the accuracy and completeness of the system-generated reports used in the operation of this control. (AS 2201.39)

Deficiency testing the accuracy and completeness of an issuer-prepared schedule used in substantive revenue testing.

The issuer recognized revenue from multiple revenue streams. The following deficiency was identified: • The firm used certain issuer-prepared data to substantively test one of the issuer's revenue disclosures but did not perform any procedures to test or test any controls over the accuracy of this data. (AS 1105.10)

The issuer generated certain revenue from its distribution of electricity that its customers purchased from other energy companies. The firm selected for testing a control over the volumes of electricity distributed by the issuer. The firm did not identify and test any controls over the accuracy and completeness of the volumes of electricity that the issuer's customers purchased from other energy companies that were used in this control. (AS 2201.39)

The firm used these volume data in its substantive testing of this revenue but did not perform any procedures to test or in the alternative identify and test any controls over the accuracy and completeness of these data as discussed above. (AS 1105.10)

The issuer recognized revenue from certain contracts that provided for the reimbursement of (1) employee-related costs which the issuer calculated using the time incurred by its employees to perform certain services under these contracts and (2) other expenses incurred by the issuer. The following deficiencies were identified: · The firm selected for testing a control that included a review of the employee-related costs and other expenses. The firm did not identify and test any controls over the accuracy and completeness of the time and expense information that the control owners used in the performance of this control. (AS 2201.39)

The issuer recognized revenue from certain contracts that provided for the reimbursement of (1) employee-related costs which the issuer calculated using the time incurred by its employees to perform certain services under these contracts and (2) other expenses incurred by the issuer. The following deficiencies were identified: · The firm used the issuer's time information in its substantive testing of this revenue. The firm did not test or (as discussed above) test controls over the accuracy and completeness of this information. (AS 1105.10)

The firm did not identify and test any controls over the accuracy and completeness of certain sales transactions that were manually entered into the IT system for processing. (AS 2201.39)

The issuer recorded certain revenue based on information about the quantities sold and delivery dates that was provided by a third-party administrator. The following deficiencies were identified: · The firm used the quantities sold and delivery date information in its substantive testing of this revenue but did not perform any substantive procedures to test or in the alternative identify and test any controls over (as discussed above) the accuracy and completeness of this information. (AS 1105.10)

The firm used information that was produced by these IT systems in performing certain of its substantive procedures to test this revenue but did not have a basis to rely on this information due to the deficiencies in the firm's testing of access controls discussed above. The firm did not perform any substantive procedures to test or (as discussed above) sufficiently test controls over the accuracy and completeness of this information. (AS 1105.10)

The issuer recorded certain revenue based on information about the quantities sold and delivery dates that was provided by a third-party administrator. The following deficiencies were identified: · The firm did not identify and test any controls over the accuracy and completeness of the information provided by the third-party administrator. (AS 2201.39)

As a result of the audit deficiencies the firm did not perform sufficient substantive procedures to test or sufficiently test controls over the accuracy and completeness of certain system-generated data it used in its substantive testing of this revenue. (AS 1105.10)

For certain revenue the issuer provided qualified customers with volume rebates that it estimated based on historical sales data. The firm selected for testing a control that consisted of the recalculation and reconciliation to the general ledger of these rebates. The firm did not identify and test any controls over the accuracy and completeness of the historical sales data used in the operation of this control. (AS 2201.39)

The firm did not perform substantive procedures to test or in the alternative identify and test any controls over the accuracy and completeness of the historical sales data that the firm used in its substantive testing of the volume rebates. (AS 1105.10)

The issuer recognized revenue based on contractual rates and hours incurred for services provided to its customers and the firm selected a sample of these revenue transactions by business unit for testing. The following deficiencies were identified: · For revenue for another business unit the firm used contractual rate and service hour information from one of the issuer's systems in its testing but did not perform any procedures to test or test any controls over the accuracy of the contractual rates and the accuracy and completeness of the service hours. (AS 1105.10)

The issuer recognized revenue based on contractual rates and hours incurred for services provided to its customers and the firm selected a sample of these revenue transactions by business unit for testing. The following deficiencies were identified: · For revenue for two other business units the firm used service hour information from another of the issuer's systems in its testing but did not perform any procedures to test or test any controls over the accuracy and completeness of this information. (AS 1105.10)

The issuer disclosed the aggregate amount of transaction prices allocated to unsatisfied performance obligations and during the year made modifications to certain existing contracts that resulted in a change in the time frame for a performance obligation to be satisfied. The following deficiencies were identified: · The firm did not identify and test any controls over the accuracy and completeness of the issuer-prepared schedules used to develop the disclosure of unsatisfied performance obligations. (AS 2201.39)

The issuer disclosed the aggregate amount of transaction prices allocated to unsatisfied performance obligations and during the year made modifications to certain existing contracts that resulted in a change in the time frame for a performance obligation to be satisfied. The following deficiencies were identified: · The firm used these issuer-prepared schedules in its testing of this disclosure but did not perform any procedures to test or test any controls over the accuracy and completeness of these schedules. (AS 1105.10)

The issuer used two IT systems to initiate process and record transactions related to one type of revenue. The firm tested automated controls that used certain data that were input into these systems but did not identify and test any controls that addressed the accuracy and completeness of these data. (AS 2201.39)

The issuer recognized certain of this revenue upon delivery based on the delivery dates that were manually entered into the system. The firm did not identify and test any controls that addressed the accuracy and completeness of those delivery dates. (AS 2201.39)

The firm used certain data from these systems in its substantive testing of this 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 recognized revenue from multiple revenue streams. The following deficiency was identified: · The firm selected for testing a control over one revenue stream that consisted of the issuer's reconciliation of revenue data between the billing system and general ledger system. The firm did not identify and test any controls over the accuracy and completeness of the information used in the operation of this control. (AS 2201.39)