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The firm's internal inspection program had inspected this audit and reviewed certain of these areas but did not identify certain of the deficiencies below. The issuer used multiple IT systems to initiate process and record transactions related to revenue accounts receivable and long-lived assets. In its testing of controls over these accounts the firm tested various automated and IT-dependent manual controls that used data and reports generated or maintained by these IT systems. With respect to Revenue which was affected by the audit deficiencies related to user access and change management the following additional deficiency was identified: · The firm's approach for substantively testing revenue consisted primarily of performing a software-assisted analysis to test the relationships among revenue accounts receivable and cash receipts. The reliability of the audit evidence obtained from this analysis was dependent upon the firm's testing of cash receipts data underlying the analysis. To test this data the firm reconciled certain cash activity used in the analysis to the respective cash accounts in the issuer's general ledger and agreed a sample of cash receipts to bank statements and customer remittance advices. The firm did not perform sufficient procedures to evaluate whether the cash receipts data was appropriate for use in the analysis because it (1) did not reconcile all cash activity used in the analysis to the respective cash accounts in the issuer's general ledger (2) made the majority of its cash receipts selections from the population of trade accounts receivable and unallocated receivable journal entries rather than the cash journal entries used in the analysis and (3) did not evaluate whether certain cash receipts selected for testing related to revenue and were appropriately included in the cash data underlying the analysis. (AS 1105.10)

In addition the sample sizes the firm used were too small to provide sufficient appropriate audit evidence because these procedures were designed based on a level of control reliance that was not supported due to the deficiencies in the firm's control testing discussed above. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A)

For certain revenue the issuer's system initiated revenue recognition upon the issuer's review and input of shipment information into the system. The following deficiencies were identified: · The firm selected for testing an automated control over this revenue that was designed to record revenue once the shipment information was manually entered into the issuer's system. The firm did not test the configuration of the automated control or perform other procedures to obtain sufficient appropriate audit evidence that the automated control was operating as designed. (AS 2201.42 and .44)

For certain revenue the issuer's system initiated revenue recognition upon the issuer's review and input of shipment information into the system. The following deficiencies were identified: In addition the firm did not identify and test any controls over the issuer's review of the shipment information that was manually entered into the issuer's system. (AS 2201.39)

For certain revenue the issuer's system initiated revenue recognition upon the issuer's review and input of shipment information into the system. The following deficiencies were identified: · The sample sizes the firm used in certain of its substantive procedures to test this revenue were too small to provide sufficient appropriate audit evidence because these procedures were designed based on a level of control reliance that was not supported due to the deficiencies in the firm's control testing discussed above. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A)

For all three business units the firm selected for testing an automated control over the pricing of revenue transactions within the revenue systems. Pricing for many cases was based on the issuer's costs. The firm did not evaluate whether this control was appropriately configured to operate over each scenario contained in customer contracts. (AS 2201.42 and .44)

In addition the firm did not identify and test any controls that addressed whether the revenue systems appropriately applied the item costs that were used to generate customer sales invoices. (AS 2201.39)

For one of the three business units the firm selected a control that consisted of the manual resolution of exceptions identified through an automated process to determine whether daily sales had shipped. The firm did not (1) test the configuration of the automated control that identified exceptions and (2) identify and test the aspects of the control related to the manual steps that the control owners performed to resolve the identified exceptions. (AS 2201.42 and .44)

For another one of the three business units the firm selected for testing controls that consisted of management's reviews of a sample of changes made to the pricing information within the revenue system. The firm did not evaluate whether the sample of changes subject to the reviews was sufficient to identify any misstatements that in the aggregate could be material. (AS 2201.42)

For all three business units the firm's substantive procedures to test revenue consisted of testing samples of transactions. In performing its testing of the selected transactions the firm did not evaluate whether the selling prices that the issuer used to record revenue agreed with the terms in the customer contracts. (AS 2301.08)

The firm did not identify and test any controls over this revenue. (AS 2201.39)

The issuer processed revenue for one of its business units using two billing systems. The firm selected for testing various automated controls related to the revenue recorded by both systems. The firm did not test the configuration of the automated controls or perform other procedures that would have provided sufficient appropriate audit evidence that the automated controls were designed and operating effectively. (AS 2201.42 .44 and .B9)

The sample sizes the firm used in certain of its substantive procedures to test revenue were too small to provide sufficient appropriate audit evidence because these procedures were designed based on a level of control reliance that was not supported due to deficiencies in the firm's testing of ITGCs discussed and the deficiency in the firm's control testing related to certain revenue discussed above. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A)

The firm did not perform any substantive procedures to test this revenue. (AS 2301.08)

The firm selected for testing a control that consisted of the review of the issuer's accounting for certain revenue arrangements for conformity with GAAP. The firm did not identify and test any controls over the completeness of certain information that the control owners used in the performance of this control. (AS 2201.39)

The firm selected for testing a manual control that consisted of the review of pricing in all new and modified contracts. The sample that the firm used to test this control was too small to provide sufficient appropriate audit evidence that the control was operating effectively because it limited the sample to one contract modification. (AS 2201.44)

The firm's approach for substantively testing certain revenue consisted primarily of performing a software-assisted analysis which included performing procedures to test the accuracy of information used in this analysis. The software-assisted analysis was designed to test the relationships among revenue accounts receivable and cash that the issuer recorded through journal entries. The firm however did not perform procedures to test the appropriateness of the cash data used in this analysis. (AS 1105.10)

The firm's approach for substantively testing certain revenue consisted primarily of performing a software-assisted analysis which included performing procedures to test the accuracy of information used in this analysis. The software-assisted analysis was designed to test the relationships between revenue and cash that the issuer recorded through journal entries. The firm however did not perform procedures to test the appropriateness of the cash data used in this analysis. (AS 1105.10)

The firm's approach for substantively testing certain revenue consisted primarily of performing a software-assisted analysis which included performing procedures to test the accuracy of information used in this analysis. The software-assisted analysis was designed to test the relationships among revenue accounts receivable and cash that the issuer recorded through journal entries. The firm did not perform sufficient procedures to test the appropriateness of certain information used in this analysis because it did not perform procedures to test whether the cash receipts were relevant to the revenue being tested. (AS 1105.10)

The firm's approach for substantively testing certain revenue consisted primarily of performing a software-assisted analysis to test the relationships among revenue accounts receivable and cash receipts. The firm's approach to addressing the reliability of the audit evidence obtained from this type of analysis was dependent upon the firm's testing of certain controls over the data underlying the analysis and the firm's tests of details of the underlying data. The firm did not perform sufficient procedures to test and test controls over this underlying data. Specifically for one control the firm did not test (1) an aspect of the control that addressed whether the cash receipts were related to this revenue and (2) whether the control addressed all cash receipts used in this analysis. Further when performing its tests of details the firm did not select its sample from the data that was used in this analysis. (AS 1105.10)

The firm's approach for substantively testing certain revenue consisted primarily of performing a software-assisted analysis to test the relationships among revenue accounts receivable and cash receipts. The firm's approach to addressing the reliability of the audit evidence obtained from this type of analysis was dependent upon the firm's testing of certain data underlying the analysis. The firm did not sufficiently test this underlying data because it did not select its sample from the data that was used in this analysis. (AS 1105.10)

The firm's approach for substantively testing certain revenue consisted primarily of performing a software-assisted analysis to test the relationships among revenue accounts receivable and cash receipts. The firm's approach to addressing the reliability of the audit evidence obtained from this type of analysis was dependent upon the firm's testing of certain data underlying the analysis. The firm did not sufficiently test this underlying data because it tested a sample that was smaller than the one the firm determined necessary for these procedures. (AS 1105.10)

The firm's approach for substantively testing certain revenue consisted primarily of performing a software-assisted analysis to test the relationships among revenue accounts receivable and cash receipts. The firm's approach to addressing the reliability of the audit evidence obtained from this type of analysis was dependent upon the firm's testing of certain data underlying the analysis. The firm did not sufficiently test this underlying data because for certain cash selections the firm did not inspect external evidence or perform other procedures to evaluate whether the cash receipts related to this revenue. (AS 1105.10)

The firm's approach for substantively testing revenue consisted primarily of performing a software-assisted analysis to test the relationships among revenue accounts receivable and cash receipts. The firm's approach to addressing the reliability of the audit evidence obtained from this type of analysis was dependent upon the firm's testing of certain data underlying the analysis. The firm did not sufficiently test this underlying data because it did not select its sample from the entire population of data that was used in this analysis. (AS 1105.10)

The firm did not perform any substantive procedures to test one type of revenue. (AS 2301.08)

The firm's approach for substantively testing another type of revenue consisted primarily of performing a software-assisted analysis to test the relationships among revenue accounts receivable and cash receipts. The reliability of the audit evidence obtained from this analysis was dependent upon the firm's testing of the cash receipts data underlying the analysis. The firm did not sufficiently test this underlying data because it did not evaluate whether it was appropriate to include in the analysis certain cash receipts not related to the revenue being tested. (AS 1105.10)

The firm selected for testing a control over the issuer's review of contracts for appropriate revenue recognition. The firm did not evaluate the specific review procedures that the control owners performed to assess whether the allocation of revenue to separate performance obligations was based on standalone selling prices. (AS 2201.42 and .44)

The firm did not perform any substantive procedures to evaluate whether the issuer's allocation of revenue to separate performance obligations was based on standalone selling prices. (AS 2301.08)

For one type of revenue the firm selected for testing certain automated controls that the issuer used to process and record transactions related to this revenue. The firm did not sufficiently test the operating effectiveness of these controls because its procedures consisted of testing for each control a sample of one transaction in the issuer's IT testing environment without performing any procedures to determine whether the testing environment was the same as the production environment at the time of its testing. (AS 2201.44)

The firm's approach for substantively testing the above revenue and another type of revenue consisted primarily of performing a software-assisted analysis to test the relationships among revenue accounts receivable and cash receipts. The firm did not perform sufficient procedures to test this revenue as follows: · For the first type of revenue discussed above the reliability of the audit evidence obtained from this analysis was dependent upon the firm's testing of a control over the data underlying the analysis. The firm did not evaluate whether the control selected for testing addressed all the cash receipts used in this analysis. (AS 1105.10)

The firm's approach for substantively testing the above revenue and another type of revenue consisted primarily of performing a software-assisted analysis to test the relationships among revenue accounts receivable and cash receipts. The firm did not perform sufficient procedures to test this revenue as follows: · For the second type of revenue the reliability of the audit evidence obtained from this analysis was dependent upon the firm's testing of details of certain data underlying the analysis. The sample the firm tested for the fourth quarter was smaller than the one the firm determined necessary for these procedures. (AS 1105.10)

The firm selected for testing a combination of automated and manual controls to address the risk that revenue was not accurately recorded. The firm did not sufficiently test certain of these manual controls which consisted of the issuer's reviews of (1) customer credit requests (2) customer rebates and (3) the accounts receivable aging as follows: · For the controls related to customer credit requests and rebates the firm did not test or in the alternative test any controls over the completeness of the system-generated reports that it used to select its samples for testing these controls. (AS 1105.10)

The firm selected for testing a combination of automated and manual controls to address the risk that revenue was not accurately recorded. The firm did not sufficiently test certain of these manual controls which consisted of the issuer's reviews of (1) customer credit requests (2) customer rebates and (3) the accounts receivable aging as follows: · For the control related to the accounts receivable aging the firm did not identify and test any controls that addressed the application of cash receipts to accounts receivable balances. (AS 2201.39)

The firm did not identify and test any controls over the occurrence of revenue. (AS 2201.39)

The issuer used an information technology (IT) system to process certain transactions related to revenue. In its testing of controls over revenue the firm tested various automated and IT-dependent manual controls that used data and reports generated or maintained by this IT system. As a result of the following deficiencies in the firm's testing of IT general controls (ITGCs) the firm's testing of these automated and IT-dependent controls was not sufficient. (AS 2201.46)

With respect to user access: · The firm selected for testing a control that consisted of the annual review of user access. The firm did not identify and test any controls over the completeness of the user access listing used in the operation of the control. (AS 2201.39)

With respect to user access: · The firm selected for testing a control that consisted of the annual review of user access. The firm did not test an aspect of the control related to the role and functions assigned to users. (AS 2201.42 and .44)

With respect to user access: · The firm selected for testing another control that consisted of the review of new and modified user access tickets. The firm did not perform sufficient procedures to test the completeness of the user access list from which it made its selections to test this control because it did not (1) evaluate whether the user access list was a customizable report and (2) test any customization used to generate the user access list. (AS 1105.10)

The firm selected for testing a control that consisted of the issuer's review of new and modified contracts for appropriate revenue recognition. The firm did not evaluate the specific review procedures that the control owners performed to assess the appropriateness of (1) the performance obligations identified and (2) the standalone selling price used to allocate revenue to separate performance obligations. (AS 2201.42 and .44)

The firm did not perform any substantive procedures to (1) evaluate the reasonableness of the performance obligations identified and (2) test the standalone selling price used to allocate revenue to separate performance obligations. (AS 2301.08)

During the audit the firm did not identify and evaluate that the issuer's accounting for certain transactions as revenue was not in conformity with FASB ASC Topic 840 Leases. (AS 2810.30) Unrelated to our review the issuer reevaluated its accounting for these transactions and concluded that a material misstatement existed that had not been previously identified. The issuer subsequently corrected this misstatement in a restatement of its financial statements and the firm revised and reissued its report on the financial statements.

The issuer recognized one type of revenue from arrangements with related parties that provided for the reimbursement of certain costs that the issuer incurred. The firm identified a fraud risk related to the issuer's allocation of costs to these arrangements. For these costs the firm did not perform a test of details to address this fraud risk. (AS 2301.13)

The issuer recognized certain revenue from contracts based on labor hours recorded in the issuer's time system. The firm used these labor hours in its substantive testing of this revenue but did not test or test any controls over the accuracy and completeness of these labor hours. (AS 1105.10)

With respect to a third type of revenue the firm's substantive procedures included performing substantive analytical procedures. The threshold that the firm established to investigate differences was too high to identify misstatements that could be material either individually or in the aggregate. (AS 2305.20)

With respect to a third type of revenue the firm's substantive procedures included performing substantive analytical procedures. The firm identified certain differences in excess of the firm's established threshold but did not obtain any evidential matter to corroborate the differences. (AS 2305.21)

For certain revenue which was affected by the audit deficiencies discussed above the following additional deficiencies related to the firm's testing of controls were identified: · The firm selected for testing controls over certain of this revenue that consisted of the issuer's reviews of financial results. The firm did not evaluate whether the design of these controls was sufficiently precise to detect material misstatements. (AS 2201.42)

For certain revenue which was affected by the audit deficiencies discussed above the following additional deficiencies related to the firm's testing of controls were identified: · The firm selected for testing three IT-dependent manual controls over the processing of certain customer orders and invoices. For two of these controls the firm did not identify and test any controls over the accuracy and completeness of certain data used in the operation of these controls. (AS 2201.39)

For certain revenue which was affected by the audit deficiencies discussed above the following additional deficiencies related to the firm's testing of controls were identified: · The firm selected for testing three IT-dependent manual controls over the processing of certain customer orders and invoices. For the third control the firm's testing of controls over the accuracy and completeness of a report used in the operation of this control using a sample of only one instance was not sufficient because the firm did not test whether changes to configurations within these controls were subject to effective ITGCs over these IT systems. (AS 2201.46)

For certain revenue which was affected by the audit deficiencies discussed above the following additional deficiencies related to the firm's testing of controls were identified: · The firm did not test or test any controls over the completeness of the system-generated reports that it used to make selections for testing certain controls over this revenue. (AS 1105.10)

The firm performed substantive procedures to test certain revenue as of an interim date. The firm did not perform sufficient procedures to extend its conclusions from the interim date to year end because it did not (1) compare relevant information about this revenue at the interim date with comparable information at year end to identify amounts that appear unusual and investigate such amounts and (2) perform audit procedures to test the remaining period beyond performing a correlation analysis without testing the underlying data used in this analysis. (AS 2301.45)