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The issuer used an information-technology (IT) application to generate reports from various systems that processed and recorded revenue and inventory transactions. The following deficiencies were identified: · The firm did not identify and test any controls that addressed whether all of the reports with changes were subject to this review. (AS 2201.39)

The issuer used an information-technology (IT) application to generate reports from various systems that processed and recorded revenue and inventory transactions. The following deficiencies were identified: · The firm selected for testing various IT-dependent manual controls over this revenue and inventory that used these reports. As a result of the deficiencies discussed above the firm's testing of these manual controls was not sufficient. (AS 2201.46)

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 selected for testing a control that consisted of the issuer's review of the prices and quantities that the issuer used to record revenue. The firm did not identify and test any controls over the completeness of the system-generated report that was used in the operation of this control. (AS 2201.39)

The issuer used an external specialist to evaluate the issuer's oil and gas reserves that were used in the valuation of properties for which oil and gas reserves had been assigned (“proved properties”). The firm selected for testing a control that consisted of the issuer's review of the data and assumptions used in its estimate of its oil and gas reserves for proved properties. The firm did not evaluate the specific review procedures that the control owner performed to assess the reasonableness of certain assumptions. (AS 2201.42 and .44)

The issuer concluded that certain of its properties that had no assigned oil and gas reserves (“unproved properties”) were not impaired primarily based on management's intent to drill on these properties. The firm concluded that the issuer's assessment was reasonable but did not evaluate certain information including the issuer's disclosure related to substantial doubt about its ability to continue as a going concern and changes in management's plans with respect to certain other unproved or proved undeveloped properties that indicated the issuer may not have the ability or intent to carry out its plans. (AS 2501.09 .10 and .11; AS 2810.03) [This citation refers to AS 2501 Auditing Accounting Estimates which was in effect for this audit. This standard was replaced by AS 2501 Auditing Accounting Estimates Including Fair Value Measurements which became effective for audits of financial statements for fiscal years ending on or after December 15 2020.]

During the audit the firm did not identify and appropriately address that the issuer's accounting for certain warrants as equity was not in conformity with FASB ASC Topic 815 Derivatives and Hedging. (AS 2810.30) 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. The issuer also reevaluated its controls over the accounting for these warrants and concluded that a material weakness existed that had not been previously identified. The issuer subsequently reflected this material weakness in a revision to its report on ICFR and the firm revised its opinion on the effectiveness of the issuer's ICFR to express an adverse opinion and reissued its report.

During the year the issuer acquired a business. The firm did not identify and appropriately address that the issuer's inclusion of certain equity awards as part of the accounting for this business combination was not in conformity with FASB ASC Topic 718 Stock Compensation and FASB ASC Topic 805 Business Combinations. (AS 2810.30) Unrelated to our review the issuer reevaluated its accounting for this business combination 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 also reevaluated its controls over the accounting for this business combination and concluded that a material weakness existed that had not been previously identified. The issuer subsequently reflected this material weakness in a revision to its report on ICFR and the firm revised and reissued its report to include an additional material weakness.

The firm selected for testing a control that consisted of management's review of the impairment analysis of long-lived assets. The firm did not identify and test any controls over the accuracy and completeness of a report which included discounted cash flows used in the operation of this control. (AS 2201.39)

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

The firm used the work of internal audit to evaluate the operating effectiveness of certain inventory controls but did not evaluate the quality and effectiveness of the work performed by internal audit to test these controls. (AS 2605.24)

To test the existence of raw materials inventory the firm observed the issuer's physical inventory counts at select locations. The firm did not perform sufficient procedures to test the existence of this inventory at year end because the firm's observation procedures were not suitable as the locations it selected for testing had no quantities of raw materials inventory on hand at the time of the observations. Therefore these observations did not provide any evidence of the quantity and physical condition of any raw materials inventory. (AS 2510.09)

To test the existence of raw materials inventory the firm observed the issuer's physical inventory counts at select locations. The firm did not perform any substantive procedures to test the existence of the remaining population of raw materials inventory. (AS 2301.08)

The firm did not perform any substantive procedures to test the existence of work-in-progress inventory. (AS 2510.09)

To test the existence of deferred revenue the firm selected a sample of items for testing. The sample size the firm used in its substantive test of details was too small to provide sufficient appropriate audit evidence because the firm did not take into account the characteristics of the population in determining its sample size. (AS 2315.16 .23 and .23A)

The issuer engaged an independent qualified reserve engineer ('company's specialist') to estimate its oil and gas reserves ('reserve estimates') which were then used in the (1) calculation of depreciation depletion and amortization; (2) impairment analysis of long-lived assets; and (3) valuation of a business combination. The reserve estimates were also used in the operation of certain controls over the above activities that the firm selected for testing. The firm did not identify and test any controls over the (1) accuracy and completeness of information prepared by the issuer (2) relevance and reliability of data from external sources and (3) methods and assumptions; all of which were used by the company's specialist to develop the reserve estimates. (AS 2201.39)

The firm's approach for substantively testing the reserve estimates was to test the issuer's process. The firm did not perform sufficient procedures to test the reserve estimates because the firm did not: · Test the accuracy and completeness of information prepared by the issuer and used by the company's specialist to develop the reserve estimates; (AS 1105.A8a)

The firm's approach for substantively testing the reserve estimates was to test the issuer's process. The firm did not perform sufficient procedures to test the reserve estimates because the firm did not: · Evaluate the relevance and reliability of external data used by the company's specialist to develop the reserve estimates; (AS 1105.A8a)

The firm's approach for substantively testing the reserve estimates was to test the issuer's process. The firm did not perform sufficient procedures to test the reserve estimates because the firm did not: · Evaluate the reasonableness of the assumptions developed by the company's specialist and used to develop the reserve estimates; (AS 1105.A8b)

The firm's approach for substantively testing the reserve estimates was to test the issuer's process. The firm did not perform sufficient procedures to test the reserve estimates because the firm did not: · Evaluate whether the methods used by the company's specialist to develop the reserve estimates were appropriate under the circumstances taking into account the requirements of the applicable financial reporting framework beyond inquiry of the methods used with the company's specialist. (AS 1105.A8c)

To test certain revenue the firm selected contracts for testing that met specific criteria to evaluate whether the revenue was appropriately recognized based on the terms of those contracts. The firm did not perform any substantive procedures to test the remaining population of revenue transactions from this revenue source. (AS 1105.27; AS 2301.08 and .11)

To test certain unbilled receivables and deferred revenue the firm selected for testing unbilled receivables and deferred revenue that met specific criteria to evaluate whether the balances tested were properly recorded. The firm did not perform any substantive procedures to test the remaining population of unbilled receivables and deferred revenue from this revenue source. (AS 1105.27; AS 2301.08)

The firm did not perform sufficient procedures to test certain revenue because the firm did not perform any test of details to address the fraud risk related to the occurrence of revenue. (AS 2301.08 and .13)

During the year the issuer acquired a business and engaged a specialist to determine the fair value of the acquired loans. The company's specialist determined this fair value based on discounted cash flows it developed using various inputs and assumptions including expected credit losses loan risk ratings certain loan attributes and whether certain loans should be designated as purchased with credit deterioration. The following deficiencies were identified: · The firm selected for testing a control that included the issuer's review of the expected credit loss assumptions used to value the acquired loans but did not evaluate the specific review procedures that the control owners performed to assess the reasonableness of these assumptions. (AS 2201.42 and .44)

During the year the issuer acquired a business. The acquired assets primarily consisted of oil and gas properties that had oil and gas reserves assigned (“proved properties”) and properties that had no oil and gas reserves assigned (“unproved properties”). The issuer determined the fair value of the acquired oil and gas properties based on discounted cash flows it developed using various assumptions including future production volumes and certain adjustment factors. The following deficiencies were identified: · The firm selected for testing a control that included the issuer's review of the adjustment factor assumptions used but did not evaluate whether the thresholds the control owner used to identify items for investigation were sufficiently precise to detect material misstatements. (AS 2201.42)

During the year the issuer acquired a business. The acquired assets primarily consisted of oil and gas properties that had oil and gas reserves assigned (“proved properties”) and properties that had no oil and gas reserves assigned (“unproved properties”). The issuer determined the fair value of the acquired oil and gas properties based on discounted cash flows it developed using various assumptions including future production volumes and certain adjustment factors. The following deficiencies were identified: · The firm did not evaluate whether the issuer had a reasonable basis for certain of the significant adjustment factor assumptions it used. (AS 2501.16)

During the year the issuer acquired a business. The acquired assets primarily consisted of oil and gas properties that had oil and gas reserves assigned (“proved properties”) and properties that had no oil and gas reserves assigned (“unproved properties”). The issuer determined the fair value of the acquired oil and gas properties based on discounted cash flows it developed using various assumptions including future production volumes and certain adjustment factors. The following deficiencies were identified: · The firm did not identify and test any controls that addressed whether all of the acquired leases that were associated with oil and gas properties were recognized. (AS 2201.39)

During the year the issuer acquired a business. The acquired assets primarily consisted of oil and gas properties that had oil and gas reserves assigned (“proved properties”) and properties that had no oil and gas reserves assigned (“unproved properties”). The issuer determined the fair value of the acquired oil and gas properties based on discounted cash flows it developed using various assumptions including future production volumes and certain adjustment factors. The following deficiencies were identified: · The firm did not perform any substantive procedures to test whether all of the acquired leases that were associated with unproved properties were recognized. (AS 2301.08)

During the year the issuer acquired a business. The acquired assets primarily consisted of oil and gas properties that had oil and gas reserves assigned (“proved properties”) and properties that had no oil and gas reserves assigned (“unproved properties”). The issuer determined the fair value of the acquired oil and gas properties based on discounted cash flows it developed using various assumptions including future production volumes and certain adjustment factors. The following deficiencies were identified: · To test the acquired leases that were associated with unproved properties the firm made its selections from a report but did not test or test controls over the completeness of this report. (AS 1105.10)

The issuer assigned a risk rating to each commercial loan. The loan risk rating was an important input in estimating the ACL for commercial loans collectively assessed for impairment. The following deficiencies were identified: · The firm identified a deficiency related to a control that consisted of the issuer's periodic review of loan risk ratings assigned to certain commercial loans. The firm tested various controls that it believed would compensate for this deficiency but did not identify that these controls did not address whether the risk ratings were reviewed and updated timely. (AS 2201.68)

The issuer assigned a risk rating to each commercial loan. The loan risk rating was an important input in estimating the ACL for commercial loans collectively assessed for impairment. The following deficiencies were identified: · The firm's sample to test the reasonableness of the risk ratings for certain commercial loans was too small because in determining its sample the firm did not consider certain characteristics of the loan population. (AS 2315.16 .23 and .23A)

The firm excluded from the scope of its audits certain accounts payable at certain of the issuer's business units. The firm did not evaluate whether the risks of material misstatement that the firm associated with accounts payable subject to audit procedures also applied to the excluded accounts payable. (AS 2101.11 and .12; AS 2201.B10)

Certain of the issuer's inventory was subject to cycle counts and the issuer used its inventory systems to determine the frequency with which the items should be counted by assigning a designation to each inventory item. The firm selected for testing a control that consisted of the issuer's cycle-count procedures. The firm did not test the aspects of this control that addressed whether each system assigned the appropriate designation to each inventory item the systems were properly configured to ensure that each inventory item was counted with sufficient frequency in accordance with the assigned designation and inventory counts were performed in accordance with the designated count frequency. (AS 2201.42 and .44)

During the year the issuer acquired a business and engaged a specialist to determine the fair value of the acquired loans. The company's specialist determined this fair value based on discounted cash flows it developed using various inputs and assumptions including expected credit losses loan risk ratings certain loan attributes and whether certain loans should be designated as purchased with credit deterioration. The following deficiencies were identified: · The firm did not identify and test any controls over the accuracy and completeness of the acquired loan information that the issuer provided to the company's specialist that the specialist used to determine the fair value of the acquired loans. (AS 2201.39)

During the year the issuer acquired a business and engaged a specialist to determine the fair value of the acquired loans. The company's specialist determined this fair value based on discounted cash flows it developed using various inputs and assumptions including expected credit losses loan risk ratings certain loan attributes and whether certain loans should be designated as purchased with credit deterioration. The following deficiencies were identified: · The firm selected for testing a control that consisted of the issuer's review for a sample of loans of the loan risk ratings assigned to certain acquired commercial loans. The firm did not evaluate whether the sample of loans that were reviewed was sufficient to address the risks of material misstatement presented by the different risk characteristics inherent in the population of these acquired commercial loans. (AS 2201.42)

During the year the issuer acquired a business and engaged a specialist to determine the fair value of the acquired loans. The company's specialist determined this fair value based on discounted cash flows it developed using various inputs and assumptions including expected credit losses loan risk ratings certain loan attributes and whether certain loans should be designated as purchased with credit deterioration. The following deficiencies were identified: · The firm selected for testing a control that consisted of the issuer's review for a sample of loans of the loan risk ratings assigned to certain acquired commercial loans. The firm did not identify and test any controls that addressed the reasonableness of the loan risk ratings assigned to certain other acquired commercial loans that were not subject to the loan risk rating review control. (AS 2201.39)

During the year the issuer acquired a business and engaged a specialist to determine the fair value of the acquired loans. The company's specialist determined this fair value based on discounted cash flows it developed using various inputs and assumptions including expected credit losses loan risk ratings certain loan attributes and whether certain loans should be designated as purchased with credit deterioration. The following deficiencies were identified: · The firm selected for testing controls that consisted of the issuer's review of the accuracy and completeness of certain data related to the acquired loans but did not test the aspects of these controls that addressed the accuracy of certain loan attributes that the company's specialist used. (AS 2201.42 and .44)

During the year the issuer acquired a business and engaged a specialist to determine the fair value of the acquired loans. The company's specialist determined this fair value based on discounted cash flows it developed using various inputs and assumptions including expected credit losses loan risk ratings certain loan attributes and whether certain loans should be designated as purchased with credit deterioration. The following deficiencies were identified: · The firm selected for testing a control that consisted of the issuer's review of acquired loans that were designated as purchased with credit deterioration. The firm did not identify and test any controls over the accuracy and completeness of the loan information that the control owner used in the operation of this control. (AS 2201.39)

The issuer assigned a risk rating to each commercial loan. The loan risk rating was an important input (1) in estimating the ACL for commercial loans collectively assessed for impairment and (2) in determining the fair value of a certain type of commercial loans that the issuer reclassifies to available-for-sale (AFS) securities for financial reporting purposes. The firm's sample to test the reasonableness of the risk ratings for commercial loans including loans reclassified to AFS securities was too small because in determining its sample the firm did not consider certain characteristics of the loan population including whether the population of loans reclassified to AFS securities should have been tested separately. (AS 2315.16 .23 and .23A)

During the year the issuer acquired a business. The acquired assets primarily consisted of oil and gas properties that had oil and gas reserves assigned (“proved properties”) and properties that had no oil and gas reserves assigned (“unproved properties”). The issuer determined the fair value of the acquired oil and gas properties based on discounted cash flows it developed using various assumptions including future production volumes and certain adjustment factors. The following deficiencies were identified: · The firm selected for testing a control that included the issuer's review of the future production volume assumptions used for unproved properties but did not evaluate the specific review procedures the control owner performed to assess the reasonableness of these assumptions. (AS 2201.42 and .44)

During the year the issuer acquired a business. The acquired assets primarily consisted of oil and gas properties that had oil and gas reserves assigned (“proved properties”) and properties that had no oil and gas reserves assigned (“unproved properties”). The issuer determined the fair value of the acquired oil and gas properties based on discounted cash flows it developed using various assumptions including future production volumes and certain adjustment factors. The following deficiencies were identified: · The firm did not sufficiently evaluate the reasonableness of the significant future production volume assumptions the issuer used to determine the fair value for unproved properties because the firm's procedures were limited to comparing the future production volumes to the issuer's estimated future development costs by year and concluding that they were highly correlated. (AS 2501.16)

The firm selected for testing a control that included the issuer's review of its disclosures related to revenue intangible assets and segment reporting. The firm did not identify and test any controls over the accuracy and completeness of the data and reports that the control owner used in the operation of this control for these disclosures. (AS 2201.39) In connection with our review the issuer reevaluated its controls over its disclosures and concluded that a material weakness existed that had not been previously identified. The issuer subsequently revised its report on ICFR to reflect this material weakness and the firm modified its opinion on the effectiveness of the issuer's ICFR to express an adverse opinion and reissued its report.

The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. During the year the issuer acquired a business. The acquired assets primarily consisted of oil and gas properties that had oil and gas reserves assigned. The issuer used company-employed specialists to estimate the issuer's oil and gas reserves that were used in the (1) valuation of the acquired oil and gas properties and (2) calculation of depletion expense for these acquired oil and gas properties. The issuer recorded depletion expense for the acquired oil and gas properties using the oil and gas reserves that the company's specialists estimated using financial and non-financial data produced by the issuer and assumptions developed by the issuer or the company's specialists. The following deficiencies were identified: · The firm did not evaluate whether the methods used by the company's specialists were appropriate under the circumstances. (AS 1105.A8c)

Certain of the issuer's revenue arrangements included multiple performance obligations. The issuer allocated the total transaction price for each of these arrangements to the separate performance obligations based on the issuer's estimate of the relative standalone selling prices. The following deficiencies were identified: · The firm did not identify and test any controls over the issuer's determination of the standalone selling prices. (AS 2201.39)

Certain of the issuer's revenue arrangements included multiple performance obligations. The issuer allocated the total transaction price for each of these arrangements to the separate performance obligations based on the issuer's estimate of the relative standalone selling prices. The following deficiencies were identified: · The firm did not perform any substantive procedures to evaluate the reasonableness of the standalone selling prices that the issuer used to record revenue. (AS 2301.08)

Certain of the issuer's revenue arrangements included multiple performance obligations. The issuer allocated the total transaction price for each of these arrangements to the separate performance obligations based on the issuer's estimate of the relative standalone selling prices. The following deficiencies were identified: · The firm did not perform any substantive procedures to evaluate certain contractual terms and conditions that could affect the issuer's determination of the duration of certain contracts and the related revenue recognition. (AS 2301.08)

Certain of the issuer's revenue arrangements included multiple performance obligations. The issuer allocated the total transaction price for each of these arrangements to the separate performance obligations based on the issuer's estimate of the relative standalone selling prices. The following deficiencies were identified: · The firm selected for testing a control that included the issuer's review of certain contracts under these types of arrangements for appropriate revenue recognition. The firm did not identify that the control was not designed to address whether the issuer considered all reasonably available information when estimating the standalone selling prices. (AS 2201.42)

Certain of the issuer's revenue arrangements included multiple performance obligations. The issuer allocated the total transaction price for each of these arrangements to the separate performance obligations based on the issuer's estimate of the relative standalone selling prices. The following deficiencies were identified: · The firm did not evaluate whether the methods that the issuer used to estimate the standalone selling prices maximized the use of observable inputs in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2501.10)

Certain of the issuer's revenue arrangements included multiple performance obligations. The issuer allocated the total transaction price for each of these arrangements to the separate performance obligations based on the issuer's estimate of the relative standalone selling prices. The following deficiencies were identified: · The firm did not evaluate whether the methods that the issuer used to determine the effect of changes in the transaction price after contract inception were in conformity with FASB ASC Topic 606 beyond observing that certain changes were approved. (AS 2501.10)

The issuer used an information-technology (IT) system to initiate process and record transactions related to inventory at one business unit. In its testing of controls over this inventory the firm tested various automated and IT-dependent manual controls that used data and reports generated or maintained by this IT system. As a result of deficiencies in the firm's testing of IT general controls (ITGCs) the firm's testing of these automated and IT-dependent controls was not sufficient. (AS 2201.46)