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The issuer used a different IT system at another component which was an outsourced application to initiate process and record revenue transactions. The firm inspected the related service auditor's report for this system and noted that the accuracy and completeness of standard reports generated from this system were addressed through certain ITGCs over the system that were tested by the service auditor. The service auditor's report however did not specifically identify the standard reports that were addressed through these ITGC's. For certain revenue transactions invoices were generated and revenue was recognized once the order fulfillment status in the system indicated that the orders had been fulfilled. The following deficiency was identified: · The firm selected for testing controls over this revenue that consisted of (1) management's review and approval of sales orders created in this IT system and (2) management's review of new prices and changes to existing prices before those prices and changes were uploaded into this IT system. The firm identified deficiencies in the design and operating effectiveness of these controls. The firm identified and tested compensating controls that it believed would mitigate the deficiencies. The firm did not identify that these compensating controls did not address the risks of material misstatement related to inaccurate and unauthorized sales orders and prices related to this revenue. (AS 2201.68) Unrelated to our review the issuer filed a Form 8-K indicating that its previously issued financial statements and the firm's related audit reports should not be relied upon because of certain material misstatements contained in the financial statements. The issuer corrected the misstatements and reported that its ICFR was not effective. The firm also expressed an adverse opinion on the effectiveness of the issuer's ICFR.

The issuer used a different IT system at another component which was an outsourced application to initiate process and record revenue transactions. The firm inspected the related service auditor's report for this system and noted that the accuracy and completeness of standard reports generated from this system were addressed through certain ITGCs over the system that were tested by the service auditor. The service auditor's report however did not specifically identify the standard reports that were addressed through these ITGC's. For certain revenue transactions invoices were generated and revenue was recognized once the order fulfillment status in the system indicated that the orders had been fulfilled. The following deficiency was identified: · The firm did not identify and test any controls that would address risks associated with improper revenue recognition from certain sales. (AS 2201.39) Unrelated to our review the issuer filed a Form 8-K indicating that its previously issued financial statements and the firm's related audit reports should not be relied upon because of certain material misstatements contained in the financial statements. The issuer corrected the misstatements and reported that its ICFR was not effective. The firm also expressed an adverse opinion on the effectiveness of the issuer's ICFR.

The issuer used a different IT system at another component which was an outsourced application to initiate process and record revenue transactions. The firm inspected the related service auditor's report for this system and noted that the accuracy and completeness of standard reports generated from this system were addressed through certain ITGCs over the system that were tested by the service auditor. The service auditor's report however did not specifically identify the standard reports that were addressed through these ITGC's. For certain revenue transactions invoices were generated and revenue was recognized once the order fulfillment status in the system indicated that the orders had been fulfilled. The following deficiency was identified: · The firm did not identify and test any controls over the accuracy of the fulfillment status in this IT system. (AS 2201.39) Unrelated to our review the issuer filed a Form 8-K indicating that its previously issued financial statements and the firm's related audit reports should not be relied upon because of certain material misstatements contained in the financial statements. The issuer corrected the misstatements and reported that its ICFR was not effective. The firm also expressed an adverse opinion on the effectiveness of the issuer's ICFR.

The issuer used a different IT system at another component which was an outsourced application to initiate process and record revenue transactions. The firm inspected the related service auditor's report for this system and noted that the accuracy and completeness of standard reports generated from this system were addressed through certain ITGCs over the system that were tested by the service auditor. The service auditor's report however did not specifically identify the standard reports that were addressed through these ITGC's. For certain revenue transactions invoices were generated and revenue was recognized once the order fulfillment status in the system indicated that the orders had been fulfilled. The following deficiency was identified: · The firm selected for testing a control that consisted of management's review of a sales discounts/rebates analysis workbook and the related journal entry to record the sales discounts/rebates. The firm did not perform sufficient procedures to test the accuracy and completeness of the revenue report which was used in the operation of this control because it did not perform procedures to verify that it was a standard report within the scope of the service auditor's report beyond inquires of management. (AS 2201.42) Unrelated to our review the issuer filed a Form 8-K indicating that its previously issued financial statements and the firm's related audit reports should not be relied upon because of certain material misstatements contained in the financial statements. The issuer corrected the misstatements and reported that its ICFR was not effective. The firm also expressed an adverse opinion on the effectiveness of the issuer's ICFR.

The issuer used a different IT system at another component which was an outsourced application to initiate process and record revenue transactions. The firm inspected the related service auditor's report for this system and noted that the accuracy and completeness of standard reports generated from this system were addressed through certain ITGCs over the system that were tested by the service auditor. The service auditor's report however did not specifically identify the standard reports that were addressed through these ITGC's. For certain revenue transactions invoices were generated and revenue was recognized once the order fulfillment status in the system indicated that the orders had been fulfilled. The following deficiency was identified: · The firm did not perform sufficient procedures to evaluate whether certain revenue was recognized in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers ('ASC 606') because at the time revenue was recognized for certain transactions the firm did not obtain any evidence that a legally enforceable contract existed or that the performance obligation was satisfied. (AS 2301.08 and .11) Unrelated to our review the issuer filed a Form 8-K indicating that its previously issued financial statements and the firm's related audit reports should not be relied upon because of certain material misstatements contained in the financial statements. The issuer corrected the misstatements and reported that its ICFR was not effective. The firm also expressed an adverse opinion on the effectiveness of the issuer's ICFR.

At two of the issuer's business units the issuer recognized certain revenue over time based on information that was provided by an external party. The following deficiencies were identified: · The firm did not identify and test any controls over the reliability of the information provided by the external party. (AS 2201.39)

At two of the issuer's business units the issuer recognized certain revenue over time based on information that was provided by an external party. The following deficiencies were identified: · The sample sizes the firm used in 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 deficiency in the firm's control testing discussed above. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A)

At certain other business units the following deficiencies were identified: · The firm did not identify and test any controls that addressed whether the performance obligations had been satisfied before revenue was recognized. (AS 2201.39)

At certain other business units the following deficiencies were identified: · The firm did not perform substantive procedures beyond observing the issuer's processing of one revenue transaction to evaluate whether the performance obligations had been satisfied before revenue was recognized. (AS 2301.08)

The issuer recognized certain revenue over time from contracts for which it had an enforceable right to payment for inventory that did not have an alternative use to the issuer. The issuer's IT system for this revenue was configured to recognize revenue upon shipment and the issuer recorded manual adjustments to recognize revenue at period end based on the progress it made to manufacture goods in inventory that had not been shipped. The firm selected for testing 1) an automated control that included the designation of sales orders in the system as “on hold” until the issuer completed a review of each sales order prior to shipment and 2) the control related to the issuer's review of each sales order with the “on hold” designation in the system to ensure it was associated with a valid contract. The following deficiencies were identified: · For the automated control the firm did not test the aspect that addressed whether all types of sales orders received this “on hold” designation. (AS 2201.42 and .44)

The issuer recognized certain revenue over time from contracts for which it had an enforceable right to payment for inventory that did not have an alternative use to the issuer. The issuer's IT system for this revenue was configured to recognize revenue upon shipment and the issuer recorded manual adjustments to recognize revenue at period end based on the progress it made to manufacture goods in inventory that had not been shipped. The firm selected for testing 1) an automated control that included the designation of sales orders in the system as “on hold” until the issuer completed a review of each sales order prior to shipment and 2) the control related to the issuer's review of each sales order with the “on hold” designation in the system to ensure it was associated with a valid contract. The following deficiencies were identified: · For the sales order review control the firm did not perform sufficient procedures to test the completeness of the population of items from which it selected its samples because it did not perform any procedures over the completeness of the population of sales orders associated with goods in inventory that the issuer had begun to manufacture. (AS 1105.10)

The issuer recognized certain revenue over time from contracts for which it had an enforceable right to payment for inventory that did not have an alternative use to the issuer. The issuer's IT system for this revenue was configured to recognize revenue upon shipment and the issuer recorded manual adjustments to recognize revenue at period end based on the progress it made to manufacture goods in inventory that had not been shipped. The firm selected for testing 1) an automated control that included the designation of sales orders in the system as “on hold” until the issuer completed a review of each sales order prior to shipment and 2) the control related to the issuer's review of each sales order with the “on hold” designation in the system to ensure it was associated with a valid contract. The following deficiencies were identified: · The firm identified a control deficiency related to the lack of a requirement for the sales order review control to be performed before the issuer began to manufacture the inventory. In determining whether the deficiency represented a material weakness the firm did not sufficiently evaluate the severity of this deficiency because (1) its procedures to evaluate the magnitude of the potential misstatement were limited to determining the total inventory amount that would represent a material misstatement and (2) the firm did not perform procedures to evaluate whether there was a reasonable possibility that the issuer's controls would fail to prevent or detect a misstatement beyond concluding that the possibility of that type of misstatement would be remote without performing procedures to support that conclusion. (AS 2201.62)

The issuer recognized certain revenue based in part on transaction data provided by an external service provider. The firm did not identify and test any controls that addressed the reliability of the majority of these data. (AS 2201.39)

The issuer entered into certain revenue arrangements with multiple performance obligations and allocated the total consideration from these arrangements between goods and services. The firm selected for testing a control that consisted of management's review of new contracts for appropriate revenue recognition. The firm did not evaluate the review procedures that the control owners performed including the procedures to identify items for follow up and the procedures to determine whether those items were appropriately resolved. (AS 2201.42 and .44)

For one business unit the firm selected for testing a control that consisted of management's review of a monthly revenue variance analysis. The firm did not evaluate the review procedures that the control owner performed including for certain customers the procedures to identify items for follow up and the procedures to determine whether those items were appropriately resolved. (AS 2201.42 and .44)

For this business unit the firm's substantive procedures to test revenue consisted of testing samples of transactions and performing substantive analytical procedures. The following deficiencies were identified: · 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 purchase orders or contracts. (AS 2301.08)

For this business unit the firm's substantive procedures to test revenue consisted of testing samples of transactions and performing substantive analytical procedures. The following deficiencies were identified: · The sample size the firm used was 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 deficiency in the firm's control testing discussed above. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A)

For this business unit the firm's substantive procedures to test revenue consisted of testing samples of transactions and performing substantive analytical procedures. The following deficiencies were identified: · In performing the substantive analytical procedures the firm did not evaluate whether the relationship between cash receipts and revenue was sufficiently predictable. (AS 2305.13 and .14)

For another business unit the firm selected for testing a control that consisted of management's review of a monthly revenue variance analysis. The firm did not evaluate the review procedures that the control owner performed including the procedures to identify items for follow up and the procedures to determine whether those items were appropriately resolved. (AS 2201.42 and .44)

For this business unit the firm's substantive procedures to test revenue consisted of substantive analytical procedures. The firm did not (1) evaluate whether prior period revenue was sufficiently predictive of revenue for the year and (2) develop certain other expectations it used in these analytical procedures based on industry revenue growth data at a level of precision to provide sufficient appropriate audit evidence. (AS 2305.13 .14 and .17)

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)

The issuer recognized revenue from multiple revenue streams. The following deficiency was identified: · The firm selected for testing other controls over this revenue stream that consisted of the issuer's reconciliation of (1) revenue data between the general ledger system and one of its financial reporting systems and (2) revenue data among certain financial reporting systems. The firm did not sufficiently test the operating effectiveness of these controls because it did not evaluate how identified deficiencies in certain systems interface controls between these systems could impact the operating effectiveness of the revenue reconciliation controls. (AS 2201.44)

The issuer recognized revenue from multiple revenue streams. The following deficiency was identified: · The firm selected for testing a control over another revenue stream that consisted of the issuer's (1) review of customer contracts in excess of a specified threshold and (2) determination as to whether the revenue from the selected contracts was recognized in conformity with the relevant accounting standard. The firm did not evaluate whether the threshold used in the control could effectively prevent or detect a material misstatement. (AS 2201.42)

The issuer recognized revenue from multiple revenue streams. The following deficiency was identified: · The firm's substantive procedures to test certain revenue included performing substantive analytical procedures. The expectations the firm used were not sufficiently precise to identify differences that could be potential material misstatements individually or in the aggregate because the firm did not disaggregate the data used to develop the expectations to address important factors that have an effect on the recognition of the revenue. (AS 2305.17)

The issuer recognized revenue from multiple revenue streams. The following deficiency was identified: · The firm did not perform substantive procedures to test certain other revenue beyond (1) examining customer invoices produced by the issuer for a sample of revenue transactions (2) verifying the mathematical accuracy of those invoices and reconciling the total invoiced amounts to the general ledger and (3) obtaining customer contracts for the selected revenue transactions and summarizing certain terms of those contracts. (AS 2301.08)

The issuer recorded multiple types of revenue. For premium revenue the firm's primary substantive procedure consisted of analytical procedures. The following deficiency was identified: · The expectations the firm used were not sufficiently precise because although disaggregated the firm's procedures consisted of comparisons of amounts and certain ratios to prior years without determining whether the prior-year amounts and ratios were sufficiently predictive of current-year amounts and ratios. (AS 2305.13 and .14)

The issuer recorded multiple types of revenue. For premium revenue the firm's primary substantive procedure consisted of analytical procedures. The following deficiency was identified: · The firm developed its expectations in part using data derived from the recorded amounts of revenue. The firm did not evaluate whether these data were sufficiently relevant and reliable for the purpose of achieving its audit objectives. (AS 1105.04 and .06; AS 2305.16)

The issuer recorded multiple types of revenue. For premium revenue the firm's primary substantive procedure consisted of analytical procedures. The following deficiency was identified: · The firm used certain system-generated data in its substantive testing of this revenue but did not test or in the alternative test any controls over the accuracy of these data. (AS 2305.16)

The issuer recorded multiple types of revenue. For premium revenue the firm's primary substantive procedure consisted of analytical procedures. The following deficiency was identified: · The firm did not establish an amount of difference from the expectation that could be accepted without further investigation. (AS 2305.20)

For investment income the firm's substantive procedures consisted of performing analytical procedures using certain issuer data or data from a third-party service provider. For the analytical procedures the firm did not determine whether the expectations it used in these analytical procedures were based on predictable relationships and whether its expectations of interest rates based on the trend over several previous years were sufficiently precise. (AS 2305.13 .14 and .17).

For investment income the firm's substantive procedures consisted of performing analytical procedures using certain issuer data or data from a third-party service provider. The firm did not evaluate whether the data used in the analytical procedures was sufficiently reliable for the purpose of achieving its audit objectives. (AS 2305.16)

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 issuer recognized revenue from multiple sources. The following deficiency was identified: · To test certain revenue the firm selected transactions from a report the issuer prepared and recalculated the related revenue using the key terms underlying the selected transactions as reflected in the report. The firm did not perform any procedures to test the (1) occurrence of the selected transactions and (2) accuracy of the key terms underlying those transactions that the firm used to recalculate the related revenue. (AS 2301.08)

The issuer recognized revenue from multiple sources. The following deficiency was identified: · The firm did not perform any procedures to test certain other revenue. (AS 2301.08)

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

The firm did not perform procedures to test certain revenue beyond determining for a sample of revenue transactions that a contract existed between the issuer and the respective clients and agreeing the respective amounts recorded to invoices the issuer generated. (AS 2301.08)

The issuer operated an e-commerce platform. The following deficiency was identified: · The firm selected for testing a control over revenue that consisted of the issuer's review and approval of third-party invoices including the performance of certain two-way and three-way matches between those invoices and documents and/or information produced by the issuer. The firm did not test the aspects of the control related to the two-way and three-way matches. (AS 2201.42 and .44)

The issuer operated an e-commerce platform. The following deficiency was identified: · The firm selected for testing another control over revenue that consisted of the issuer's review and approval of certain changes the issuer made to data in its system that affected revenue recognition. The firm identified a deficiency in the design and operating effectiveness of this control. The firm identified and tested a compensating control that it believed would mitigate the deficiency. The firm did not identify that the other control did not address the appropriateness of changes made by authorized personnel. (AS 2201.68)

To substantively test revenue the firm selected revenue transactions for testing that exceeded a monetary threshold. The firm did not perform sufficient procedures to test the remaining population of revenue transactions as its testing was limited to comparing prior year revenues to current year amounts. (AS 1105.27; AS 2301.08 and .13)

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

The firm did not perform procedures to test whether performance obligations were satisfied prior to the recognition of certain other revenue. (AS 2301.08)

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

The firm did not perform any substantive procedures to test certain revenue. (AS 2301.08 and .13)

In its testing of revenue the firm did not evaluate whether the issuer appropriately recognized revenue in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2810.30)

In addition the firm did not identify and appropriately address a departure from GAAP related to the issuer's (i) disclosure that it recognized revenue under FASB ASC Topic 605 Revenue Recognition when in fact it recognized revenue under FASB ASC Topic 606 and (ii) omission of certain disclosures related to FASB ASC Topic 606. (AS 2810.30 and .31)

The issuer recognized revenue from different sources. The following deficiencies were identified: · The firm did not evaluate the effect of certain sales terms and conditions on the transaction price. (AS 2301.08 and .13)

The issuer recognized revenue from different sources. The following deficiencies were identified: · For certain revenue the firm did not evaluate whether the existence of certain arrangements or terms and conditions affected when performance obligations were satisfied. (AS 2301.08 and .13)

The issuer recognized revenue from different sources. The following deficiencies were identified: · The firm did not perform procedures beyond completing a disclosure checklist to evaluate whether the disclosures in the financial statements met certain requirements of FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2301.08 and .13)

The issuer recognized revenue from different sources. The following deficiencies were identified: · The firm used certain external information in its substantive procedures to test certain revenue but did not perform any procedures to evaluate the reliability of this information. (AS 1105.04 and .06)

The issuer recognized revenue from different sources. The following deficiencies were identified: · The firm did not evaluate whether certain arrangements in its contracts with customers represented performance obligations. (AS 2301.08 and .13)