Explorer

The issuer recorded revenue based on completed delivery of products to its customers. The firm tested certain transactions prior to year end to determine whether the issuer recorded revenue in the appropriate period. The firm however did not perform any procedures to verify that delivery had occurred before revenue was recorded. (AS 2301.08)

The firm was instructed by the principal auditor to perform year-end cut-off procedures. The firm did not perform procedures to test or identify and test any controls over the completeness of the system-generated report used to select samples subsequent to year end to test cut-off. (AS 1105.10)

The firm did not perform procedures to test certain revenue including whether all criteria for revenue recognition had been met. (AS 2301.08)

To test revenue the firm selected sales transactions for testing that exceeded a monetary threshold. The firm did not perform any procedures to test the remaining population of sales transactions. (AS 1105.27)

To test revenue the firm selected sales transactions for testing that exceeded a monetary threshold. For the sales transactions selected for testing the firm did not evaluate whether all of the relevant revenue recognition criteria had been met. (AS 2301.08)

The issuer disclosed the amounts of unsatisfied performance obligations. The following deficiencies were identified: · The firm did not identify and test any controls over the unsatisfied performance obligations the issuer expected to be recognized as revenue within the next 12 months. (AS 2201.39)

The issuer disclosed the amount of unsatisfied performance obligations. The following deficiencies were identified: · The firm selected for testing a control that included the issuer's review of this disclosure. The firm did not identify and test any controls over the accuracy and completeness of the issuer-prepared schedules related to this disclosure that were used in the operation of this control. (AS 2201.39)

The issuer disclosed the amount of unsatisfied performance obligations. The following deficiencies were identified: · The firm used these issuer-prepared schedules in its substantive testing of this disclosure but did not perform any procedures to test or test any controls over the accuracy and completeness of these schedules. (AS 1105.10)

The issuer disclosed the amount of unsatisfied performance obligations. The following deficiencies were identified: · The firm did not identify and evaluate a misstatement in this required disclosure under FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2810.30 and .31)

The issuer disclosed the amounts of unsatisfied performance obligations. The following deficiencies were identified: · The firm selected for testing a control that consisted of the issuer's review of unsatisfied performance obligations that it expected to be recognized as revenue beyond the next 12 months. 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)

The issuer disclosed the amounts of unsatisfied performance obligations. The following deficiencies were identified: · The firm performed a substantive analytical procedure to test this disclosure. The firm did not determine whether the expectation it used in this analytical procedure was based on predictable relationships. (AS 2305.13 and .14)

The issuer disclosed the amounts of unsatisfied performance obligations. The following deficiencies were identified: · The firm established its threshold for investigating differences based on a level of control reliance that was not supported due to the above deficiencies in the firm's testing of controls. As a result the threshold that the firm used did not provide the desired level of assurance that misstatements that could have been material would be identified. (AS 2301.16 .18 and .37; AS 2305.20)

The issuer recognized revenue from multiple revenue streams. The following deficiency was identified: · The firm did not identify and test any controls over the occurrence of certain revenue. (AS 2201.39)

The issuer recognized revenue from multiple revenue streams. The following deficiency was identified: · The firm did not perform any substantive procedures to test the occurrence of certain revenue. AS 2301.08)

The firm selected for testing a control that consisted of the component's review of topside journal entries related to revenue recognition. 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 used certain historical data of the component to evaluate the reasonableness of certain assumptions the component used to recognize revenue for a material contract. The firm did not perform any procedures to test or in the alternative identify and test any controls over the accuracy and completeness of the historical data used in its evaluation. (AS 1105.10)

The firm's substantive procedures to test an assumption used to recognize revenue included substantive analytical procedures. In performing these procedures the firm did not 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. (AS 2305.17)

The firm selected for testing a control that consisted of the issuer's monthly comparison of revenue by customer to revenue recorded in the prior month and the investigation of variances over an established threshold. The firm did not evaluate the specific review procedures that the control owner performed to investigate identified variances and determine whether items identified for follow-up had been appropriately resolved. (AS 2201.42 and .44)

The issuer generated certain revenue at numerous locations from sales of multiple types of products. The firm selected for testing controls over this revenue that included (1) reviews of each location's monthly operating results and (2) reviews of monthly and year-to-date revenue for each type of product. The firm did not evaluate the specific review procedures that the control owners performed to evaluate whether the amounts recognized as revenue were appropriate. (AS 2201.42 and .44)

The firm's sample for testing certain revenue was too small to provide sufficient appropriate audit evidence because in determining its sample size the firm inappropriately used a risk of material misstatement that was lower than its assessed risk of material misstatement for this revenue. (AS 2315.23 and .23A)

With respect to four types of revenue the following deficiencies were identified: · The firm did not identify and test any controls over the accuracy and completeness of the customer order information from various source systems that the issuer used to record revenue. (AS 2201.39)

With respect to four types of revenue the following deficiencies were identified: · The firm's substantive procedures to test three of these types of revenue consisted of substantive analytical procedures. The firm used revenue data that were based on information from the various source systems to develop its expectations but did not test or identify and test controls over the accuracy and completeness of these revenue data. (AS 2305.16)

With respect to four types of revenue the following deficiencies were identified: · The firm selected for testing controls that consisted of the issuer's reviews of financial results including comparisons of each type of revenue to prior-period revenue and for three of these types of revenue to forecasted 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)

With respect to four types of revenue the following deficiencies were identified: · The firm selected for testing controls over the forecasted revenue used in the operation of the controls discussed above. The firm did not evaluate the specific review procedures that the control owners performed to assess the reasonableness of the forecasted revenue. (AS 2201.42 and .44)

With respect to four types of revenue the following deficiencies were identified: · The firm did not identify and test any controls over the accuracy and completeness of the forecast reports used in the operation of these controls. (AS 2201.39)

With respect to other types of revenue that were recorded at certain of the issuer's business units ('other revenue types') the following deficiencies were identified: · The firm did not evaluate whether specific risks of material misstatement existed for these other revenue types including whether the risks of material misstatement that the firm associated with revenue types at other business units subject to more extensive audit procedures also applied to these other revenue types. (AS 2101.11 and .12; AS 2201.B10)

With respect to other types of revenue that were recorded at certain of the issuer's business units ('other revenue types') the following deficiencies were identified: · The firm selected for testing a control that consisted of the issuer's reviews of financial results including these other revenue types. 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)

With respect to other types of revenue that were recorded at certain of the issuer's business units ('other revenue types') the following deficiencies were identified: · The firm did not perform any substantive procedures to test these other revenue types. (AS 2301.08)

The issuer generated certain revenue from the sale of electricity. The firm selected for testing a control over the volumes of electricity delivered that consisted of the issuer's comparison of adjusted monthly volumes to the corresponding prior-period adjusted volumes. The firm did not test the aspect of this control that addressed the accuracy and completeness of the information the issuer used to calculate the adjustments to the volumes delivered. (AS 2201.42 and .44)

The issuer recognized revenue from a customer contract over time based on costs incurred to date relative to total estimated costs to complete the contract. The issuer used forecasted labor hours in determining the estimated costs to complete the contract. The following deficiencies were identified: · The firm selected for testing a control that included the issuer's reviews of the forecasted labor hours. The firm did not evaluate the specific review procedures that the control owners performed to assess the reasonableness of the total forecasted labor hours. (AS 2201.42 and .44)

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

The firm's substantive procedures to test certain other revenue consisted of performing substantive analytical procedures. The firm did not accurately calculate its expected revenue and the recorded revenue amounts used in these analytical procedures. Further 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 2305.16 and .20)

The firm's internal inspection program inspected this audit and reviewed this area but did not identify the deficiency below. 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 the underlying data. The firm did not sufficiently test the accuracy of the underlying data because the firm did not (1) identify and test any controls or (2) inspect any supporting documentation or perform other procedures to evaluate the appropriateness of the data. (AS 1105.10)

The issuer recognized revenue from a customer contract over time based on costs incurred to date relative to total estimated costs to complete the contract. The issuer used forecasted labor hours in determining the estimated costs to complete the contract. The following deficiencies were identified: · The firm did not sufficiently test the estimated costs to complete the contract because it did not perform any substantive procedures beyond inquiring of issuer personnel to test the total forecasted labor hours. (AS 2501.07)

The firm's substantive procedures to test certain revenue included performing substantive analytical procedures. The firm did not determine whether the expectations used in these substantive analytical procedures were based on predictable relationships. Further 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 data used to develop the expectations did not address important factors that the issuer disclosed as having an effect on sales. (AS 2305.13 .14 and .17)

The firm's substantive procedures to test certain revenue included selecting a sample of transactions for testing. The firm's sample was too small to provide sufficient appropriate audit evidence because in determining the sample size the firm did not take into account the allowable risk of incorrect acceptance. (AS 2315.16 .23 and .23A)

The issuer recognized certain revenue based on product volumes delivered to customers. The firm used volume data in its substantive testing of this revenue but did not perform any procedures to test or test any controls over the accuracy and completeness of these data. (AS 1105.10)

The firm's internal inspection program had inspected this audit reviewed these areas and also identified the deficiencies below. The firm's substantive procedures to test revenue at certain of the issuer's locations consisted of substantive analytical procedures. For these substantive analytical procedures 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 firm did not perform any substantive procedures to test certain revenue. (AS 2301.08)

The issuer records revenue based on contractual terms with customers. The firm did not perform audit procedures that addressed an assessed risk of material misstatement associated with the recognition of revenue because the firm did not evaluate certain terms used to recognize revenue against the underlying customer contracts or other supporting documentation. (AS 2301.08)

The issuer offered various forms of sales incentives to customers that were recorded as deductions from revenue. The firm selected for testing a control that consisted of the issuer's review and approval of the allocated sales incentives. The firm did not evaluate the specific review procedures that the control owner performed to assess the accuracy of the calculated sales incentives. (AS 2201.42 and .44)

The firm selected for testing controls that consisted of the issuer's review of revenue cut-off and credit balance refunds and write-offs. 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 identified a control deficiency in that the component had not designed and implemented a control over review of new contracts and amendments for the first three quarters of the year. In response to the control deficiency identified the component designed and implemented and the firm tested a control in the fourth quarter that consisted of the review of new or amended contracts with customers whose annual sales exceeded an established threshold for appropriate revenue recognition. In testing this control the firm did not evaluate whether the threshold the control owner used to select contracts for review was sufficiently precise to detect misstatements that could be material. (AS 2201.68)

The sample size the firm used in certain of its substantive procedures to test revenue 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)

The firm did not perform any substantive procedures to test sales returns. (AS 2301.08)

The firm's approach for substantively testing certain revenue was to test the issuer's process. To substantively test this revenue the firm performed tests of details over a sample of revenue transactions including recalculating the revenue and deferred revenue for the selected transactions. The following deficiency was identified: • The firm did not perform procedures to test or test any controls over the accuracy and completeness of certain information it used to substantively test the revenue transactions. (AS 1105.10)

The firm's approach for substantively testing certain revenue was to test the issuer's process. To substantively test this revenue the firm performed tests of details over a sample of revenue transactions including recalculating the revenue and deferred revenue for the selected transactions. The following deficiency was identified: • The firm did not perform sufficient procedures to evaluate whether the revenue transactions were recorded in the proper period because it did not consider the appropriateness of the delivery dates used to recognize the revenue. (AS 2301.08 and .13)

The firm's approach for substantively testing certain revenue was to test the issuer's process. To substantively test this revenue the firm performed tests of details over a sample of revenue transactions including recalculating the revenue and deferred revenue for the selected transactions. The following deficiency was identified: • The firm did not compare the recalculated revenue and deferred revenue to the issuer's general ledger for the revenue transactions selected for testing. (AS 2301.08 and .13)

The firm's approach for substantively testing certain revenue was to test the issuer's process. To substantively test this revenue the firm performed tests of details over a sample of revenue transactions including recalculating the revenue and deferred revenue for the selected transactions. The following deficiency was identified: • The firm did not evaluate the reasonableness of a significant assumption used to estimate the amount of revenue to recognize. (AS 2501.16)

The component recognized revenue from a variety of sources. The following deficiencies were identified: · The firm selected for testing controls that consisted of management's review of certain financial results including the amount of revenue recognized during the period as compared to forecasted and/or budgeted amounts and investigation of variances. The firm did not evaluate the specific review procedures that the control owners performed to investigate identified variances. (AS 2201.42 and .44)