Explorer

The firm did not identify and test any controls over the issuer's estimates of variable consideration included in the transaction price. (AS 2201.39)

The firm did not perform procedures to test the issuer's estimates of variable consideration that it expects to ultimately include in the transaction price beyond testing the amounts the issuer invoiced to its customers during the year. (AS 2501.07)

The firm selected for testing a control that consisted of the issuer's review of the method and certain significant assumptions that were used by the issuer to develop another estimate of a related account. The firm did not evaluate the specific review procedures that the control owners performed to evaluate the appropriateness of the method and the reasonableness of certain significant assumptions that were used. (AS 2201.42 and .44)

The firm did not perform any procedures to evaluate whether the method used by the issuer to develop this other estimate was (1) in conformity with the requirements of the applicable financial reporting framework and (2) appropriate for the nature of the related account taking into account its understanding of the issuer and its environment. (AS 2501.10)

The firm's approach for substantively testing certain significant assumptions related to this other estimate was to develop an expectation using model analyses and information provided by an auditor-employed specialist for comparison to the issuer's significant assumptions. The firm did not demonstrate that it had a reasonable basis for its expectation of the significant assumptions because it did not evaluate the relevance and reliability of certain external data obtained and used by the auditor-employed specialist in developing its expectations. (AS 1105.04 and .06; AS 2501.16)

The firm's approach for substantively testing certain significant assumptions related to this other estimate was to develop an expectation using model analyses and information provided by an auditor-employed specialist for comparison to the issuer's significant assumptions. The firm did not sufficiently evaluate the work of the auditor-employed specialist and identify that the auditor-employed specialist's work did not provide sufficient appropriate audit evidence because it did not perform procedures to address limitations set forth by the auditor-employed specialist. (AS 1201.C6 and .C7)

The issuer used multiple information technology (IT) systems to initiate process and record transactions related to revenue and related accounts. 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. The firm selected for testing controls over change management and user access but for certain of these controls did not perform procedures beyond inquiry to test or test any controls over (1) the completeness of the population of items from which it made its selections for testing or (2) the accuracy of information the firm used in its testing. Further for another of these change management controls when testing the completeness of the population from which the firm made its selections for testing the firm did not test all relevant sources of changes. (AS 1105.10)

With respect to the firm's testing of controls with an automated component: · The firm selected for testing various automated controls over certain revenue and related accounts. The firm's testing of these automated controls using a sample of only one instance of the controls' operation was not sufficient because the firm did not test the programming of these controls or perform other procedures that would have provided sufficient appropriate audit evidence that these automated controls were designed and operating effectively. (AS 2201.46)

With respect to the firm's testing of controls with an automated component: · For one type of revenue the firm selected for testing a control that consisted of the automated calculation and recording of revenue and related accounts and a manual review of the accuracy of the data used in the operation of this control. The firm did not test the manual aspect of this control. (AS 2201.42 and .44)

With respect to the firm's testing of controls with an automated component: · For certain revenue the firm did not identify and test any controls over certain inputs and assumptions used by the issuer to recognize revenue. (AS 2201.39)

The firm selected for testing controls over the automated transfer or reconciliation of data between systems. The following deficiencies were identified: · Certain of these controls included the manual resolution of any errors in this data transfer. The firm did not test the operating effectiveness of the manual aspect of these controls. (AS 2201.44)

The issuer used certain systems to process sales transactions and compute and record revenue and receivables. The firm selected for testing an automated control over the processing of sales transactions and computation of the final unit prices used in the determination of revenue. The firm did not test the configuration of this automated control for all types of revenue beyond observing the processing of one sales transaction for one system inquiring of management and reviewing the source code for another system. (AS 2201.42 and .44)

The issuer used certain systems to process sales transactions and compute and record revenue and receivables. The sample sizes the firm used in certain of its substantive procedures to test revenue and receivables 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 control testing discussed above. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A)

The firm's internal inspection program inspected this audit and reviewed this area but did not identify the deficiencies below. The firm did not perform any substantive procedures to evaluate the reliability of information obtained from external sources that it used to test certain revenue and related accounts. (AS 1105.04 and .06)

The firm's internal inspection program inspected this audit and reviewed this area but did not identify the deficiencies below. The firm did not perform any procedures to test or test any controls over the accuracy and completeness of a report it used to test certain other revenue and related accounts. (AS 1105.10)

The firm's approach to test revenue included confirming amounts billed with a sample of the issuer's customers. For confirmations received the firm did not perform procedures to test whether the performance obligations were satisfied to recognize revenue. (AS 2301.08)

The firm's approach to test revenue included confirming amounts billed with a sample of the issuer's customers. The firm did not test the accuracy and completeness of the data and reports used in determining if the performance obligation was satisfied for (1) confirmation responses that were not received and (2) other revenue transactions tested where confirmations were not requested. (AS 1105.10)

The firm identified a fraud risk related to overstatement and completeness of revenue. The firm did not perform sufficient tests of details in response to the fraud risk because it limited its procedures to confirming amounts billed and testing other revenue transactions as discussed above. (AS 2301.13) Unrelated and prior to 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.

The firm did not sufficiently test the issuer's allowance for doubtful accounts because it limited its procedures to calculating the (1) allowance for doubtful accounts as a percentage of total accounts receivable and (2) percentage of accounts receivable in each aging bucket. (AS 2501.07)

To test certain revenue the firm selected sales transactions for testing that exceeded a monetary threshold. The firm did not perform procedures to test the remaining population of sales transactions. (AS 1105.27; AS 2301.08)

To test the related receivables the firm selected items for testing that exceeded a monetary threshold or met specific criteria. The firm did not perform any procedures to test the remaining population of receivables. (AS 1105.27; AS 2301.08)

The issuer recognizes multiple types of revenue. For one type of revenue and the related accounts which were measured based on estimates the following deficiency was identified: • The firm did not perform any procedures to test whether the issuer satisfied its performance obligations prior to the recognition of certain of this revenue. (AS 2301.08 and .13)

For a third type of revenue the firm relied on certain controls to reduce the nature timing and extent of its substantive procedures to test revenue. The following deficiency was identified: • The firm did not identify and test controls that addressed the completeness and accuracy of revenue transaction details used in the operation of an information-technology automated control selected for testing. (AS 2301.16)

For a third type of revenue the firm relied on certain controls to reduce the nature timing and extent of its substantive procedures to test revenue. The following deficiency was identified: • The firm did not test or identify and test any controls over the completeness and accuracy of certain system-generated data that was used to develop a significant assumption the issuer used to recognize revenue. (AS 1105.10)

Related to multiple types of revenue the firm did not identify and evaluate the issuer's omission of certain disclosures required by FASB Topic 606 Revenue from Contracts with Customers. (AS 2810.30 and .31)

The issuer recognizes multiple types of revenue. For one type of revenue and the related accounts which were measured based on estimates the following deficiency was identified: • The firm selected a sample of transactions to test the measurement of this revenue. The firm did not sufficiently evaluate whether data was appropriately used and significant assumptions were appropriately applied in measuring this revenue because it did not compare the amount of revenue it calculated for the selected transactions to the amount of revenue recorded by the issuer. (AS 2501.10)

The issuer recognizes multiple types of revenue. For one type of revenue and the related accounts which were measured based on estimates the following deficiency was identified: • The firm did not evaluate the reasonableness of certain significant assumptions that the issuer used to estimate this type of revenue. (AS 2501.16)

The issuer recognizes multiple types of revenue. For one type of revenue and the related accounts which were measured based on estimates the following deficiency was identified: • The firm did not evaluate the reasonableness of another significant assumption that the issuer used to estimate a related account. (AS 2501.16)

For a second type of revenue the following deficiency was identified: • For certain revenue of this type the firm did not perform sufficient procedures to evaluate the issuer's identification of performance obligations because it did not evaluate (1) the issuer's basis for concluding that the goods and services or bundles thereof represented a single or multiple performance obligation(s) and (2) whether the issuer was acting as the principal for the transaction rather than an agent. (AS 2301.08 and .13)

For a second type of revenue the following deficiency was identified: • The firm did not perform sufficient procedures to test when the issuer recognized revenue because it did not perform procedures to evaluate whether (1) the issuer had satisfied the performance obligation(s) at the time revenue was recognized and (2) the revenue for each performance obligation should have been recognized at a point-in-time or over time. (AS 2301.08 and .13)

For a second type of revenue the following deficiency was identified: • The firm did not perform sufficient procedures to evaluate the determination of the transaction prices because when concluding that variable consideration did not exist the firm did not evaluate aspects of the revenue transactions that indicated the presence of variable consideration. (AS 2301.08 and .13; AS 2810.03)

For a second type of revenue the following deficiency was identified: • The firm did not test or identify and test controls over the completeness and accuracy of issuer-produced data the issuer used to develop significant assumptions used in measuring variable consideration for certain revenue of this type. (AS 1105.10)

For a second type of revenue the following deficiency was identified: • The firm did not evaluate the reasonableness of a significant assumption the issuer used to measure this revenue. (AS 2501.16)

The issuer had multiple subsidiaries. During the year the issuer entered into a certain type of transaction through one of its subsidiaries. The following deficiency was identified: · The firm did not evaluate whether the issuer's accounting for the transactions was appropriate. (AS 2301.08)

The issuer had multiple subsidiaries. During the year the issuer entered into a certain type of transaction through one of its subsidiaries. The following deficiency was identified: · The firm did not perform procedures to evaluate the relevance and reliability of certain information it used as audit evidence including taking into account the issuer's circumstances and other relevant conditions. (AS 1105.04 and .06; AS 2501.29)

The issuer had multiple subsidiaries. During the year the issuer entered into a certain type of transaction through one of its subsidiaries. The following deficiency was identified: · The firm did not evaluate whether the nature of these transactions required the firm to take any action in response to certain information regarding this transaction that indicated a possible illegal act. (AS 2405.10)

The issuer had multiple subsidiaries. During the year the issuer entered into a certain type of transaction through one of its subsidiaries. The following deficiency was identified: · The firm did not evaluate whether the business purpose (or lack thereof) of these transactions indicated that the transactions may have been entered into to engage in fraudulent financial reporting or conceal misappropriation of assets. (AS 2401.67)

The firm did not perform sufficient procedures to test one type of revenue because its procedures were limited to determining for a sample of transactions that a contract existed between the issuer and the customer. (AS 2301.08)

The firm did not perform sufficient procedures to test another type of revenue because it limited its procedures to tracing a sample of revenue transactions to issuer-prepared invoices and/or other issuer prepared information. (AS 2301.08)

The firm did not perform procedures to test the completeness of a related account. (AS 2301.08)

In addition the firm did not perform sufficient procedures to test this account because it limited its procedures to tracing a sample of transactions to certain issuer-prepared information. (AS 2301.08)