Explorer

During the year the issuer issued warrants that were recorded as equity and engaged a specialist to determine the fair values of these warrants. The firm's approach for substantively testing the fair values of these warrants was to test the issuer's process and the firm used an auditor-employed specialist to evaluate the significant assumptions the company's specialist developed. The firm did not identify that the work of the auditor-employed specialist did not provide sufficient appropriate audit evidence because it did not (1) evaluate external data the auditor-employed specialist used to develop an independent expectation of one significant assumption and (2) identify that the auditor-employed specialist did not perform any procedures to evaluate certain of the other significant assumptions. (AS 1105.04 .06 and .A8b; AS 1201.C6 and .C7)

During the year the issuer also issued warrants that were recorded as liabilities and engaged a specialist to determine the fair values of these warrants. The firm did not sufficiently evaluate the reasonableness of the significant assumptions used to value these warrants at year end because its procedures were limited to reading a memorandum prepared by the company's specialist and inquiring of management regarding changes in assumptions from the original issuance date. (AS 1105.A8b)

The issuer issued warrants that were recorded as liabilities. For certain of these warrants the following deficiencies were identified: · The firm did not perform any procedures to evaluate the reasonableness of a significant assumption the issuer used to value these warrants at year end. (AS 2501.16)

The issuer engaged a specialist to determine the fair value of certain warrants it reported as equity. The firm's approach for substantively testing the fair value of these warrants was to test the issuer's process. The firm did not evaluate the reasonableness of certain significant assumptions that the company's specialist developed. (AS 1105.A8b)

Unrelated to our review the issuer reevaluated its accounting for these warrants 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. In its restated financial statements the issuer recorded these warrants as liabilities and engaged a specialist to determine the fair value for the warrants. The firm's approach for substantively testing the fair values of these warrants was to test the issuer's process. The firm did not evaluate the reasonableness of this significant assumption including whether it was consistent with relevant information. (AS 1105.A8b)

Unrelated to our review the issuer reevaluated its accounting for these warrants 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. In its restated financial statements the issuer recorded these warrants as liabilities and engaged a specialist to determine the fair value for the warrants. The firm's approach for substantively testing the fair values of these warrants was to test the issuer's process. The firm also did not evaluate the reasonableness of an assumption that was developed by the issuer and used by the company's specialist. (AS 2501.16)

During the year the issuer issued warrants that were recorded as liabilities. The firm's approach for substantively testing the fair value of these warrants at issuance was to develop an independent expectation of the estimate using an auditor-employed specialist. The following deficiencies were identified: · The firm did not identify that the auditor-employed specialist did not perform sufficient procedures to demonstrate it had a reasonable basis for a significant assumption it developed because the auditor-employed specialist did not (1) evaluate whether the external data it used to develop this assumption were relevant to the assumption beyond observing that the data were from companies with similar market capitalization and (2) evaluate the reasonableness of using the low end of the range of the comparable company data in developing this assumption. (AS 1105.04 and .06; AS 1201.C6 and .C7; AS 2501.22)

In its restated financial statements the issuer recorded these warrants as liabilities and engaged a specialist to determine the fair value for certain of these warrants. The firm's approach for substantively testing the fair values of these certain warrants was to test the issuer's process and the firm used an auditor-employed specialist to evaluate the significant assumptions the company's specialist used. The firm did not sufficiently evaluate the reasonableness of these significant assumptions because it did not identify that the auditor-employed specialist did not (1) perform any procedures to evaluate certain significant assumptions developed by the issuer and (2) evaluate whether external data that the company's specialist used to develop another significant assumption were relevant and reliable and whether that assumption was consistent with other relevant information. (AS 1105.A8a and .A8b; AS 1201. C6 and .C7; AS 2501.16)

In its restated financial statements the issuer recorded these warrants as liabilities and engaged a specialist to determine the fair value for certain of these warrants. The firm's approach for substantively testing the fair values of these certain warrants was to test the issuer's process and the firm used an auditor-employed specialist to evaluate the significant assumptions the company's specialist used. The firm did not sufficiently evaluate the reasonableness of these significant assumptions because it did not identify that the auditor-employed specialist did not evaluate whether the significant assumptions were consistent with relevant information and whether external data that the company's specialist used to develop certain of these assumptions were relevant and reliable. (AS 1105.A8a and .A8b; AS 1201.C6 and .C7)

In its restated financial statements the issuer recorded these warrants as liabilities and engaged a specialist to determine the fair value for certain of these warrants. The firm's approach for substantively testing the fair values of these certain warrants was to test the issuer's process and the firm used an auditor-employed specialist to evaluate the significant assumptions the company's specialist used. The firm did not sufficiently evaluate the reasonableness of these significant assumptions because it did not identify that the auditor-employed specialist did not (1) perform any procedures to evaluate a significant assumption developed by the issuer and a significant assumption developed by the company's specialist and (2) evaluate whether external data that the company's specialist used to develop another significant assumption were relevant and reliable and whether that assumption and other significant assumptions developed by the company's specialist were consistent with other relevant information. (AS 1105.A8a and .A8b; AS 1201.C6 and .C7; AS 2501.16)

In its restated financial statements the issuer recorded these warrants as liabilities and engaged a specialist to determine the fair value for certain of these warrants. The firm's approach for substantively testing the fair values of these certain warrants was to test the issuer's process and the firm used an auditor-employed specialist to evaluate the significant assumptions the company's specialist used. The firm did not sufficiently evaluate the reasonableness of these significant assumptions because it did not identify that the auditor-employed specialist did not (1) perform any procedures to evaluate a significant assumption developed by the issuer and (2) evaluate whether certain significant assumptions that the company's specialist developed were consistent with relevant information. (AS 1105.A8b; AS 1201.C6 and .C7; AS 2501.16)

In its restated financial statements the issuer recorded these warrants as liabilities and engaged a specialist to determine the fair value for certain of these warrants. The firm's approach for substantively testing the fair values of these certain warrants was to test the issuer's process and the firm used an auditor-employed specialist to evaluate the significant assumptions the company's specialist used. The firm did not sufficiently test the fair value of these warrants because it did not identify that the auditor-employed specialist did not evaluate whether the method the company's specialist used to value the warrants was appropriate and did not perform any procedures to evaluate a significant assumption that the company's specialist developed. (AS 1105.A8b and .A8c; AS 1201.C6 and .C7)

The issuer engaged a specialist to determine the fair value of its warrants. The firm's approach for substantively testing the fair value of these warrants was to test the issuer's process and the firm used an auditor-employed specialist to evaluate the methods and significant assumptions that the company's specialist used. The firm did not sufficiently test the fair value of these warrants because it did not identify that the auditor-employed specialist did not (1) sufficiently evaluate whether the methods that the company's specialist used were appropriate because it did not evaluate whether the data and significant assumptions used were appropriately applied (2) evaluate whether certain significant assumptions developed by the company's specialist were consistent with other relevant information and whether external data that the company's specialist used to develop one of these significant assumptions were relevant and reliable and (3) perform any procedures to evaluate the reasonableness of a significant assumption developed by the company and used by the company's specialist. (AS 1105.A8a .A8b and .A8c; AS 1201.C6 and .C7; AS 2501.16)

The issuer engaged a specialist to determine the fair value of its warrants. The firm's approach for substantively testing the fair value of these warrants was to test the issuer's process and the firm used an auditor-employed specialist to evaluate the methods and significant assumptions the company's specialist used. The firm did not sufficiently test the fair value of these warrants because it did not identify that the auditor-employed specialist did not (1) sufficiently evaluate whether certain methods that the company's specialist used were appropriate because it did not evaluate whether the data and significant assumptions used were appropriately applied and (2) perform any procedures to evaluate the reasonableness of certain significant assumptions that the company's specialist developed. (AS 1105.A8b and .A8c; AS 1201.C6 and .C7)

The issuer engaged a specialist to determine the fair value of its warrants. The firm's approach for substantively testing the fair value of these warrants was to test the issuer's process and the firm used an auditor-employed specialist to evaluate the methods and certain significant assumptions the company's specialist used. The firm did not sufficiently evaluate the reasonableness of a significant assumption developed by the company's specialist because it did not identify that the auditor-employed specialist did not evaluate whether this assumption was consistent with relevant information and whether external data that the company's specialist used to develop this assumption were relevant and reliable. (AS 1105. A8a and .A8b; AS 1201.C6 and .C7)