Explorer

The firm selected for testing a control that consisted of management's review of a reconciliation related to revenue. The firm did not (1) evaluate the specific 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)

The firm selected for testing a control that consisted of management's review of a reconciliation related to revenue. The firm did not identify and test any controls over the accuracy and completeness of the data used in the operation of the control. (AS 2201.39)

The firm selected for testing a control over sales invoices. The firm did not perform procedures to test or identify and test controls over the completeness of the issuer-produced sales invoice listing used in its testing of the control. (AS 1105.10)

The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. With respect to certain revenue recognized over time the firm did not evaluate whether there were significant judgments used by the issuer in determining the timing of satisfaction of performance obligations and whether all applicable required disclosures were made. (AS 2301.08 and .13)

The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. The firm sent positive confirmation requests to a sample of customers as part of its testing of revenue. The following deficiency was identified: · The firm did not perform procedures to determine whether certain of the confirmation requests were directed to third parties who were knowledgeable about the information to be confirmed. (AS 2310.26)

The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. The firm sent positive confirmation requests to a sample of customers as part of its testing of revenue. The following deficiency was identified: · The firm received an electronic response to one confirmation request. The firm did not consider performing procedures to address the risks associated with an electronic response such as verifying the source and contents of the confirmation response. (AS 2310.29)

During the year the issuer recorded revenue net of sales discounts. The firm did not perform any substantive procedures to test sales discounts including the related disclosures. (AS 2301.08 and .13)

The firm did not perform any procedures to test the relevance and reliability of certain data obtained from an external vendor used in its substantive testing of revenue. (AS 1105.04 and .06)

The firm did not perform any procedures to test or in the alternative test any controls over the accuracy and completeness of system-generated reports used in its substantive testing of certain revenue transactions. (AS 1105.10)

For one category of revenue the firm selected for testing an automated application control over the generation of customer invoices and recording of revenue. The firm did not test the configuration of the automated control or perform other procedures that would have provided sufficient appropriate audit evidence that the automated control was designed and operating effectively. (AS 2201.42 and .44)

The firm selected for testing another control that consisted of the issuer's review of a monthly report and the resulting journal entries that were recorded to adjust revenue. 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)

The firm selected for testing another control that consisted of the issuer's review of a monthly report and the resulting journal entries that were recorded to adjust revenue. The firm did not identify and test any controls over the accuracy and completeness of the report used in the operation of this control. (AS 2201.39)

For another category of revenue the firm selected for testing two controls that consisted of the issuer's reviews of the source documents and transaction reports that were used to record revenue. The firm did not evaluate the specific review procedures that the control owners performed to determine whether the amount to be recorded as revenue was appropriate. (AS 2201.42 and .44)

The issuer entered into a sales agreement with a new customer that contained various terms and conditions that afforded the issuer and the customer certain rights and obligations. The firm did not perform procedures to evaluate whether revenue from this sales agreement was recognized in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers beyond reading the issuer's revenue recognition memo the sales agreement and the bill of sale. (AS 2810.30)

The issuer entered into contracts with certain customers that required revenue to be recognized over time based on costs incurred to date relative to total estimated costs to complete these contracts. To substantively test revenue the firm selected a sample of invoices and performed procedures. The following deficiencies were identified: - With respect to invoices related to contracts for which all revenue was recognized by year end the firm did not perform procedures to test if the issuer's performance obligations were satisfied before revenue was recognized beyond obtaining issuer-prepared documents. (AS 2301.08)

The issuer entered into contracts with certain customers that required revenue to be recognized over time based on costs incurred to date relative to total estimated costs to complete these contracts. To substantively test revenue the firm selected a sample of invoices and performed procedures. The following deficiencies were identified: - With respect to invoices related to contracts that were open at year end the firm did not test the accuracy and completeness of certain aspects of schedules used by the issuer to determine the estimated cost for the project or the completeness of reports used to track total cost incurred for the project. (AS 1105.10)

The issuer entered into contracts with certain customers that required revenue to be recognized over time based on costs incurred to date relative to total estimated costs to complete these contracts. To substantively test revenue the firm selected a sample of invoices and performed procedures. The following deficiencies were identified: - The firm did not perform sufficient procedures to test the estimated costs to complete for contracts open at year end because the firm limited its procedures to comparing total actual costs for one contract that was completed subsequent to year end to estimated costs at year end. (AS 2501.07)

The issuer entered into contracts with certain customers that required revenue to be recognized over time based on costs incurred to date relative to total estimated costs to complete these contracts. To substantively test revenue the firm selected a sample of invoices and performed procedures. The following deficiencies were identified: - With respect to testing revenue recognition the firm drew its sample from the population of the issuer's invoices that were not necessarily representative of the revenue recorded during the year. (AS 2315.17)

The issuer engaged a manufacturer to produce and distribute certain of its products. The firm did not perform sufficient procedures to evaluate whether the issuer was acting as a principal or as the agent for this revenue in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers. Specifically in its evaluation the firm did not evaluate (1) the insurable risk of inventory (2) the manufacturer's discretion to set minimum prices for inventory sold to the issuer's customers and (3) the manufacturer's responsibility for honoring the limited warranty extended to the issuer's customers. (AS 2810.30)

The firm's internal inspection program had inspected this audit and reviewed this area but did not identify the deficiencies below. The issuer used a customized application for processing and recording transactions related to revenue. The firm tested the design and operating effectiveness of information technology general controls (ITGCs) and certain automated and IT-dependent manual controls over this application in order to rely on the completeness and accuracy of data and reports produced by the application and used by the firm in its substantive procedures. The following deficiencies were identified: · The firm selected for testing controls over the review and approval of program changes but did not evaluate whether the controls were designed to address the risk that developers have the ability to develop and promote changes to production environments. (AS 2301.19)

The firm selected a sample of transactions to test revenue. The firm did not perform procedures other than reviewing certain information on selected invoices to test whether the delivery of services had occurred prior to the issuer's recognition of revenue for certain sampled transactions. (AS 2301.08 and .13)

The firm selected a sample of transactions to test revenue. The firm selected its sample of transactions from three of the four types of revenue. The firm did not perform any procedures to test the fourth type of revenue. (AS 2315.24)

The firm tested the design and operating effectiveness of certain ITGCs over the issuer's general ledger and other systems in order to rely on the accuracy and completeness of underlying data produced by the issuer that was used in the firm's substantive testing of certain revenue. The firm identified deficiencies in its testing of certain ITGCs. The following deficiencies were identified: · The firm identified compensating controls but did not perform any procedures to test the design and operating effectiveness of those controls during the entire period of reliance. (AS 2301.16)

The firm's internal inspection program had inspected this audit and reviewed this area but did not identify the deficiencies below. The issuer used a customized application for processing and recording transactions related to revenue. The firm tested the design and operating effectiveness of information technology general controls (ITGCs) and certain automated and IT-dependent manual controls over this application in order to rely on the completeness and accuracy of data and reports produced by the application and used by the firm in its substantive procedures. The following deficiencies were identified: · The firm selected for testing controls over change management but did not perform procedures to determine whether the population of changes from which it made its selections for testing represented the complete population of changes made to this application. (AS 1105.10)

The firm tested the design and operating effectiveness of certain ITGCs over the issuer's general ledger and other systems in order to rely on the accuracy and completeness of underlying data produced by the issuer that was used in the firm's substantive testing of certain revenue. The firm identified deficiencies in its testing of certain ITGCs. The following deficiencies were identified: · The firm selected for testing certain automated and IT-dependent manual controls over this revenue. The firm's approach to testing these controls depended on effective IT general controls (ITGCs). As a result of the deficiency in the firm's testing of the controls discussed above the firm's testing of these automated and IT-dependent manual controls was not sufficient. (AS 2301.18)

The firm did not identify and evaluate 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's internal inspection program had inspected this audit and reviewed this area but did not identify the deficiencies below. The issuer's customer determined the amount of consideration for the performance obligations at the time the issuer satisfied its obligations. The firm did not perform procedures to assess whether (1) the issuer's determination of transaction price used to recognize revenue was appropriate and (2) the issuer satisfied its performance obligations prior to the recognition of revenue beyond reading the issuer's revenue recognition memo and confirming with the issuer's customer the payments made to the issuer. (AS 2301.08 and .13)

The firm's internal inspection program had inspected this audit and reviewed this area but did not identify the deficiencies below. The firm's substantive procedures to test revenue included substantive analytical procedures. The firm used external data and data derived from the recorded amounts of revenue to develop its expectation. The firm did not evaluate whether the external data was sufficiently reliable for purposes of achieving its audit objective beyond obtaining an understanding of the source of the data. (AS 2305.16)

The firm's internal inspection program had inspected this audit and reviewed this area but did not identify the deficiencies below. The firm's substantive procedures to test revenue included substantive analytical procedures. The firm used external data and data derived from the recorded amounts of revenue to develop its expectation. The firm did not evaluate whether the data derived from recorded amounts of revenue was sufficiently relevant and reliable for the purpose of achieving its audit objective. (AS 1105.04 and .06; AS 2305.16)

The firm's internal inspection program had inspected this audit and reviewed this area but did not identify the deficiencies below. The issuer used a customized application for processing and recording transactions related to revenue. The firm tested the design and operating effectiveness of information technology general controls (ITGCs) and certain automated and IT-dependent manual controls over this application in order to rely on the completeness and accuracy of data and reports produced by the application and used by the firm in its substantive procedures. The following deficiencies were identified: · The firm selected for testing certain automated and IT-dependent manual controls over this revenue. The firm's approach to testing these controls depended on effective ITGCs including controls over change management. As a result of the deficiencies in the firm's testing of the controls discussed above the firm's testing of these automated and IT-dependent manual controls was not sufficient. (AS 2301.18)

The firm's internal inspection program had inspected this audit and reviewed this area but did not identify the deficiencies below. The issuer used a customized application for processing and recording transactions related to revenue. The firm tested the design and operating effectiveness of information technology general controls (ITGCs) and certain automated and IT-dependent manual controls over this application in order to rely on the completeness and accuracy of data and reports produced by the application and used by the firm in its substantive procedures. The following deficiencies were identified: · The firm did not identify and test controls that addressed the issuer's evaluation of the reliability of external information used in the operation of certain controls the firm selected for testing. (AS 2301.16)

The firm's internal inspection program had inspected this audit and reviewed this area but did not identify the deficiencies below. The firm did not perform procedures to test the issuer's segment reporting disclosures related to revenue beyond obtaining an issuer-prepared schedule. (AS 2301.08)

The issuer used a customized application for processing and recording transactions related to revenue. The firm tested the design and operating effectiveness of ITGCs and certain automated controls over this application in order to rely on the completeness and accuracy of data and reports produced by the application and used by the firm in its substantive procedures over certain revenue. The firm determined that certain ITGCs were not effective at year end. The following deficiencies were identified: · The firm did not evaluate the severity of the ITGC deficiencies and the effect on its control risk assessment. (AS 2301.34)

The issuer used a customized application for processing and recording transactions related to revenue. The firm tested the design and operating effectiveness of ITGCs and certain automated controls over this application in order to rely on the completeness and accuracy of data and reports produced by the application and used by the firm in its substantive procedures over certain revenue. The firm determined that certain ITGCs were not effective at year end. The following deficiencies were identified: · The firm's approach to testing certain automated controls depended on effective ITGCs. As a result of the control deficiencies that the firm identified as discussed above the firm's testing of these automated and IT-dependent manual controls was not sufficient. (AS 2301.18)

The firm did not identify and appropriately address a departure from GAAP related to the issuer's inaccurate disclosure that it recognized revenue in accordance with FASB ASC Topic 606 Revenue from Contracts with Customers when it had not early adopted the new standard and was still recognizing revenue in accordance with FASB Topic ASC 605 Revenue Recognition. (AS 2810.30 and .31)

The firm's testing of revenue was not sufficient as the firm did not test whether the applicable revenue recognition criteria had been met. In addition the firm did not evaluate whether the issuer's revenue recognition was in compliance with all applicable GAAP. (AS 2301.08; AS 2810.30)

The firm did not test or test any controls over the accuracy of certain system-generated reports used to substantively test revenue. (AS 1105.10)

The firm tested certain controls over revenue at an interim date. The firm did not perform any procedures to update the results of that testing from the interim date to year end. (AS 2201.55)

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 the deficiency in the firm's control testing discussed above. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A)

The firm performed certain substantive procedures to test revenue at an interim date. The firm did not perform any procedures to extend its audit conclusions from the interim date to year end. (AS 2301.45)

To test certain revenue the firm selected transactions from certain months during the year. The firm did not perform procedures beyond performing year-end cut-off procedures to test the population of sales transactions from the remaining months. (AS 1105.27; AS 2301.08 and .13)

The sample sizes the firm used in its substantive procedures to test certain other revenue were too small to provide sufficient appropriate audit evidence because the firm did not take into account the relevant factors in determining its sample size including tolerable misstatement for the population the allowable risk of incorrect acceptance and the characteristics of the population. (AS 2315.16 .19 .23 and .23A)

The firm selected a sample of transactions to test certain revenue. For certain of the sampled transactions the firm did not perform procedures to evaluate whether (1) the issuer met its performance obligations before revenue was recognized and (2) the transaction prices used to recognize revenue were appropriate. (AS 2301.08 and .13)

The firm did not perform procedures to evaluate whether the issuer met its performance obligations before certain revenue from related parties was recognized. (AS 2410.17)

The issuer used an information technology (IT) system to process certain revenue transactions. The firm's approach to testing revenue included reliance on certain IT change management controls over certain issuer-produced information used in the firm's substantive procedures. The firm did not perform procedures to test the completeness of the information that the firm used to test these IT change management controls. (AS 1105.10)

The issuer used an information technology (IT) system to process certain revenue transactions. The firm's approach to testing revenue included reliance on certain IT change management controls over certain issuer-produced information used in the firm's substantive procedures. The issuer recognized several types of revenue. To test one type of revenue the firm performed a substantive analytical procedure using sales data produced by the issuer's system. The firm did not perform procedures to test or test any controls over the accuracy and completeness of that data. (AS 2305.16)

The issuer used an information technology (IT) system to process certain revenue transactions. The firm's approach to testing revenue included reliance on certain IT change management controls over certain issuer-produced information used in the firm's substantive procedures. The firm selected a sample of transactions to test another type of revenue. The firm did not perform procedures to test or test any controls over the accuracy and completeness of certain issuer-prepared sales data that was used in testing the selected transactions. (AS 1105.10)

The firm did not identify and evaluate a departure from GAAP related to the issuer's omission of a disclosure related to revenue. (AS 2810.30 and .31)

The firm selected for testing a control over the timing of revenue recognition. The firm however did not directly test the control because its procedures which consisted of determining that revenue was not recorded before goods were shipped for a sample of transactions were substantive in nature. (AS 2201.B9)

In addition the firm selected for testing a control that consisted of management's review of revenue including deferred revenue and the related journal entries. The firm did not evaluate the review procedures that the control owner performed including the criteria that the control owner used to identify items for follow up and whether those items were appropriately resolved. (AS 2201.42 and .44)