Explorer

The firm's substantive procedures to test revenue consisted of (1) testing a sample of revenue transactions and (2) performing substantive analytical procedures. The following deficiencies were identified: - The firm's analytical procedures consisted of developing an expectation of revenue. The firm did not (1) test or in the alternative identify and test any controls over the accuracy and completeness of certain data it used to develop its expectations (2) develop expectations at a level of precision that provided the desired level of assurance that differences that could be potential material misstatements individually or in the aggregate would be identified for investigation and (3) establish a threshold for investigation of differences from expectations. (AS 2305.16 .17 and .20)

The firm did not perform any substantive procedures to test or in the alternative test any controls over the accuracy and completeness of transactional data that was used by the issuer to record revenue and used by the firm in its test of details over a majority of the issuer's revenue. (AS 1105.10)

The firm's internal inspection program had inspected this audit and reviewed this area but did not identify the deficiencies below. The firm used system-generated data to substantively test certain revenue but did not test or sufficiently test controls over the accuracy and completeness of this data. (AS 1105.10)

The firm's internal inspection program had inspected this audit and reviewed this area but did not identify the deficiencies below. The firm used payment information produced by a third-party service organization used by the issuer to substantively test certain revenue but did not perform any procedures to test the accuracy and completeness of this information. (AS 2301.08)

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. For restaurant sales the following deficiency was identified: • The firm did not perform procedures to test or test any controls over the accuracy and completeness of the lists and reports it used in selecting its samples and in performing its testing of restaurant sales. (AS 1105.10)

To test revenue the firm selected a sample of transactions. The following deficiency was identified: · The firm did not perform any procedures to test or test any controls over the completeness of the issuer-prepared reports from which it selected transactions for testing. (AS 1105.10).

The firm selected for testing a control that consisted of a quarterly comparison of a system-generated list of invoices used to recognize revenue to the related shipping documents to determine whether revenue was recorded in the correct period. The firm did not identify and test any controls over the accuracy and completeness of the system-generated list used in the operation of this control. (AS 2201.39)

The firm used data produced by the issuer to test certain revenue. The firm did not perform any substantive procedures to test or sufficiently test controls over the accuracy and completeness of the data. (AS 1105.10)

The firm did not perform sufficient procedures to test whether revenue was recognized in accordance with FASB ASC Topic 606 Revenue from Contracts with Customers because it did not perform procedures to test or test any controls over the completeness and accuracy of the data used in the issuer's revenue analysis. (AS 1105.10)

The firm did not perform sufficient procedures to evaluate and test various controls in the revenue cycle because it did not: · Identify and test controls over the accuracy and completeness of reports that control owners used in the operation of the controls. (AS 2201.39)

In addition the firm relied upon a report produced by the service organization in its substantive procedures over certain revenue but did not test or identify and test any controls over (as discussed above) the accuracy and completeness of the report. (AS 2301.08 and .13)

The firm did not test the issuer's disclosure of revenue by type beyond tracing the amounts to an issuer-prepared schedule. (AS 2301.08)

The firm selected a sample of transactions to test certain revenue. The firm did not perform procedures to test whether the issuer satisfied its performance obligations prior to the recognition of this revenue for the sample of transactions beyond inspecting certain issuer-prepared reports and customer invoices. (AS 2301.08 and .13)

With respect to a second IT system the firm did not identify and test any controls over the accuracy and completeness of data received from external sources that was processed by this IT system. (AS 2201.39)

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

To test revenue and accounts receivable the firm performed tests of details over a sample of revenue transactions and confirmed a sample of customer receivables using certain issuer-prepared reports. The following deficiency was identified: · For certain revenue transactions selected for testing the firm did not perform procedures to test whether (1) a sales contract existed with the customer and (2) the issuer had satisfied its performance obligation prior to recognizing revenue beyond agreeing the transactions or related purchase order information to the invoice detailed report referred to above. (AS 2301.08 and .13)

The firm did not identify and test any controls over the accuracy and completeness of certain data used in the determination of certain revenue. (AS 2201.39)

The firm also used this data to substantively test this revenue. The firm did not perform any procedures to test or (as discussed above) identify and test any controls over the accuracy and completeness of this data. (AS 1105.10)

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

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

The firm did not perform sufficient substantive procedures to test certain of the issuer's revenue because its procedures were limited to comparing this revenue to system-generated reports and confirmations obtained from related parties. (AS 2301.08)

The issuer recorded certain revenue based on data in an electronic environment that were tracked and provided by a service organization. The firm used certain information produced by this service organization in its substantive testing of this revenue but did not test or test any controls over the accuracy and completeness of this information. (AS 2301.08 and .13)

The firm's substantive procedures to test certain revenue consisted of performing substantive analytical procedures. The firm used data produced by the issuer to develop its expectations but did not test or test controls over the accuracy and completeness of certain of these data. (AS 2305.16)

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

The following deficiency was identified: · The firm did not perform procedures to test or test any controls over the accuracy and completeness of certain IT system data used in its substantive testing of revenue. (AS 1105.10)

The issuer used certain IT systems to process and record transactions related to revenue. The following deficiency was identified: · The firm selected for testing a control that consisted of management's review of a billing workbook to ensure that the calculations and billing details were accurate. The firm did not identify and test any controls over the accuracy and completeness of a system-generated report and the accuracy of certain other data used in the operation of this control. (AS 2201.39)

With respect to the firm's substantive procedures the following deficiency was identified: · The firm did not perform procedures to test or sufficiently test controls over as discussed above the accuracy and completeness of information and reports that it used in its substantive procedures to test revenue. (AS 1105.10)