Explorer

The firm identified multiple deficiencies in the issuer's controls over revenue that it had selected for testing. The firm did not evaluate the severity of each control deficiency to determine whether the deficiency individually or in combination with other deficiencies constituted a material weakness. (AS 2201.62)

The firm selected for testing certain controls over the review of revenue but 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 did not evaluate the accuracy and completeness of the issuer-produced sales registry from which the firm made its selections for its substantive testing of revenue as the sales registry did not agree to the general ledger. (AS 2301.08)

The firm did not identify and evaluate a departure from IFRS related to the issuer's recognition of revenue from contract modifications under IFRS 15 Revenue from Contracts with Customers. (AS 2810.30 and .31)

The issuer recognized certain other revenue pursuant to a contract with an external party through which it agreed to provide services in exchange for noncash consideration. The firm did not perform procedures to evaluate whether the issuer recognized this revenue in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2301.08 and .13)

The issuer recognized certain revenue pursuant to contracts with new customers. The firm did not perform procedures to evaluate whether these customer contracts met the collectability criteria required to recognize revenue. (AS 2301.08 and .13)

The firm selected a sample of transactions to test revenue. The firm did not perform procedures to evaluate whether the issuer met its performance obligations before revenue was recognized. (AS 2301.08 and .13)

The issuer recognized revenue on a straight-line basis over an estimated performance period. The firm did not sufficiently evaluate the appropriateness of recognizing revenue on a straight-line basis because it did not evaluate whether the issuer's efforts or expected inputs were expended evenly throughout the estimated performance period. (AS 2301.08) In connection with our review the issuer reevaluated its accounting for revenue 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 revenue on a straight-line basis over an estimated performance period. The firm did not evaluate the reasonableness of the estimated performance period. (AS 2301.08) In connection with our review the issuer reevaluated its accounting for revenue 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 firm did not perform any substantive procedures to evaluate whether the issuer recognized revenue in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2301.08 and .13)

The firm did not perform any procedures to evaluate the relevance and reliability of the external information it used to test revenue. (AS 1105.04 and .06)

The firm's substantive procedures to test revenue included analytical procedures. The firm used the information generated from this revenue application to develop its expectations but did not test or (as discussed above) sufficiently test controls over the accuracy and completeness of this information. (AS 2305.16)

During the year the issuer recorded revenue from a bill-and-hold arrangement with one of its customers. The firm did not perform any procedures to evaluate whether the issuer met certain revenue recognition criteria for bill-and-hold arrangements beyond reading a memorandum prepared by the issuer and inquiring of management. (AS 2301.08)

The firm selected for testing a control that consisted of the issuer's review of invoices to determine whether revenue was appropriately recorded. The firm did not identify and test any controls that addressed the accuracy and completeness of the price and quantity data that the issuer used in the operation of this control. (AS 2201.39)

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)

The firm did not identify and test any controls over the initial recording of certain sales in the issuer's sales systems. (AS 2201.39)

The firm selected for testing a control over the issuer's review of certain 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)

For certain revenue the firm selected a sample of revenue transactions for testing. 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)

The firm's substantive procedures to test certain of this revenue consisted of substantive analytical procedures. The firm used certain sales data to develop its expectations but did not test the accuracy of these data. (AS 2305.16)

The issuer's process related to revenue was highly automated with transactions being initiated processed and recorded by numerous information-technology (IT) systems. The issuer identified a material weakness related to ineffective IT general controls over certain IT systems. For the sample of revenue transactions that the firm selected for testing the firm did not perform any procedures to test whether certain information that the issuer used to record revenue was appropriate beyond comparing it to information that was generated by and maintained in certain of the issuer's systems that were affected by the material weakness. (AS 2301.08)The issuer's process related to revenue was highly automated with transactions being initiated processed and recorded by numerous information-technology (IT) systems. The issuer identified a material weakness related to ineffective IT general controls over certain IT systems. For the sample of revenue transactions that the firm selected for testing the firm did not perform any procedures to test whether certain information that the issuer used to record revenue was appropriate beyond comparing it to information that was generated by and maintained in certain of the issuer's systems that were affected by the material weakness. (AS 2301.08)

For three types of revenue the firm used certain system-generated information in its substantive testing of revenue but did not perform any procedures to test or test any controls over the accuracy and completeness of this information. (AS 1105.10)

For two other types of revenue the issuer recorded revenue based on information provided by an external service provider. The firm used this information in its substantive testing of this revenue but did not perform any procedures to test the accuracy and completeness of this information. (AS 2301.08)

For certain automated controls over revenue the firm tested a sample of one transaction for each control in the issuer's IT testing environment rather than in its production environment. The firm's testing of certain of these controls was not sufficient because the firm did not perform any procedures to determine whether the testing environment was consistent with the production environment. (AS 2201.44)For certain automated controls over revenue the firm tested a sample of one transaction for each control in the issuer's IT testing environment rather than in its production environment. The firm's testing of certain of these controls was not sufficient because the firm did not perform any procedures to determine whether the testing environment was consistent with the production environment. (AS 2201.44)

For certain business units the firm identified a fraud risk but did not perform any tests of details to address this fraud risk. (AS 2301.13)

The firm selected for testing a control that consisted of the issuer's review of new or amended customer contracts for appropriate revenue recognition. The firm did not evaluate the specific review procedures that the control owner performed to identify and evaluate all relevant terms and conditions. (AS 2201.42 and .44)

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

For certain contracts the issuer recognized revenue over time based on costs incurred to date relative to total estimated costs to complete. This revenue included an estimate of variable consideration in the transaction price. The firm selected for testing controls that consisted of the issuer's review of revenue recognition for these contracts. The firm did not evaluate the specific review procedures that the control owners performed to assess the reasonableness of the significant assumptions used to estimate the total costs to complete the contracts and the variable consideration included in the transaction prices. (AS 2201.42 and .44)

For certain of these business units and another business unit the firm did not perform any substantive procedures to test the completeness of revenue. (AS 2301.08)

The issuer recorded certain revenue net of allowances for contractual adjustments. The firm's procedures to test the estimated portion of these contractual adjustments consisted of (1) developing an independent expectation (2) testing the issuer's process and (3) evaluating transactions occurring after the measurement date. The following deficiencies were identified: · When developing its independent expectation the firm did not perform procedures beyond inquiry to demonstrate it had a reasonable basis for a certain assumption it independently derived. (AS 2501.22)

The issuer recorded certain revenue net of allowances for contractual adjustments. The firm's procedures to test the estimated portion of these contractual adjustments consisted of (1) developing an independent expectation (2) testing the issuer's process and (3) evaluating transactions occurring after the measurement date. The following deficiencies were identified: · When testing the issuer's process and evaluating transactions occurring after the measurement date the firm used certain issuer-produced reports but did not perform any procedures to test or test any controls over the accuracy and/or completeness of these reports. (AS 1105.10)

The issuer recognized certain revenue based on customer usage data which was produced by one of the issuer's information technology (IT) systems. The firm did not perform procedures to test these data beyond comparing these data to information derived from this IT system. (AS 2301.08 and .13)

The issuer recognized revenue from certain contracts over time using an input method based on the labor hours incurred or number of users. The firm did not perform substantive procedures to test whether the issuer satisfied its performance obligations before recognizing this revenue beyond comparing the number of users and labor hours incurred to issuer-produced reports. (AS 2301.08 and .13)

The issuer recognized revenue from certain contracts over time by estimating its progress toward completion. The firm did not perform procedures to test this revenue beyond inspecting the contract and inquiring of project managers for a sample of contracts. (AS 2501.07)

The firm did not identify and evaluate the issuer's omission of certain required disclosures under FASB ASC Topic 606 Revenue from Contracts with Customers related to the method used to recognize revenue for one type of revenue. (AS 2810.30 and .31)

For revenue which was affected by the audit deficiencies discussed above related to change management and logical access the following additional deficiency was identified: The firm's approach for testing revenue included performing tests of details for a sample of revenue transactions. The firm did not perform sufficient procedures to verify that each individual revenue transaction had an opportunity to be selected for testing because it did not establish a basis to support the sampling interval used to select transactions for testing and as a result did not select a sample that could be expected to be representative of the population. (AS 2315.24)

The firm selected for testing certain controls over revenue that consisted of (1) the issuer's verification of certain information used to recognize revenue (2) customer approval of draft invoices (3) management's review and approval of revenue accruals and (4) management's approval of invoice adjustments. The firm did not identify and test any controls over the accuracy and completeness of certain information used in the operation of these controls. (AS 2201.39)

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 used certain information in its substantive testing of revenue but did not test or (as discussed above) test controls over the accuracy and completeness of this information. (AS 1105.10)

The firm used certain information in its testing of revenue that was obtained by the issuer from its customers but it did not perform any procedures to evaluate the reliability of this information. (AS 1105.04 and .06)

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

The firm did not perform procedures to test or in the alternative test any controls over the accuracy and completeness of certain issuer-produced reports that it used to substantively test certain revenue. (AS 1105.10)

The firm selected for testing a control that consisted of a review of quarterly adjustments to revenue for two products. The firm did not test the design and operating effectiveness of certain aspects of this review control that addressed one of the products. (AS 2201.42 and .44)

The firm selected for testing a control that consisted of a review of quarterly adjustments to revenue for two products. The firm did not identify and test any controls over the accuracy and completeness of certain data and reports provided by an external party that the control owner used in the performance of this control over the other product. (AS 2201.39)

The firm used the above data and reports to substantively test revenue from one product and did not test or (as discussed above) identify and test controls over the accuracy and completeness of these data and reports as discussed above. (AS 1105.10)

The firm selected for testing a control that consisted of management's review of the recognition of certain revenue. 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)

The firm selected for testing a control that consisted of management's review of the recognition of certain revenue. The firm did not identify and test any controls over the accuracy and completeness of a system-generated report that control owners used in the operation of this control and certain other controls that were selected for testing related to revenue. (AS 2201.39)

The firm used a system-generated report to substantively test certain revenue but did not test or (as discussed above) test controls over the accuracy and completeness of this report. (AS 1105.10)

The firm did not perform any substantive procedures to address an identified fraud risk related to revenue. (AS 2301.13)

The issuer entered into certain revenue arrangements during the year. The firm did not perform procedures beyond comparisons to issuer-produced reports to test this revenue including testing the valuation of certain aspects of revenue. (AS 2301.08 and .11; AS 2501.07)

The issuer entered into certain revenue arrangements during the year. The firm did not evaluate the business purpose (or lack thereof) of these arrangements that appeared unusual due to their timing size or nature including whether they may have been entered into to engage in fraudulent financial reporting or conceal misappropriation of assets given certain facts regarding the arrangements. (AS 2401.67)