Explorer

The firm did not identify and evaluate departures from GAAP related to the issuer's omission of certain disclosures required by FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2810.30 and .31)

The issuer engaged an external valuation specialist to perform an impairment analysis of goodwill and intangible assets at year end. The firm's approach for substantively testing the fair value was to test the issuer's process and the firm used an auditor-engaged specialist to evaluate the reasonableness of the significant assumptions the company's specialist used. The following deficiency was identified: · The firm did not perform any procedures to test or test any controls over the accuracy and completeness of certain issuer-produced data the company's specialist used in the impairment analysis. (AS 1105.A8a)

The issuer engaged an external valuation specialist to perform an impairment analysis of goodwill and intangible assets at year end. The firm's approach for substantively testing the fair value was to test the issuer's process and the firm used an auditor-engaged specialist to evaluate the reasonableness of the significant assumptions the company's specialist used. The following deficiency was identified: · The firm did not sufficiently evaluate the reasonableness of the significant assumptions developed by the issuer because it did not identify that the auditor-engaged specialist did not perform sufficient procedures to evaluate the reasonableness of (1) certain significant assumptions because it limited its procedures to certain component(s) of the assumptions and/or obtaining certain external information (2) another significant assumption because it limited its procedures to obtaining certain external information and evaluating the consistency of the assumption with relevant industry information and (3) other significant assumptions because it limited its procedures to inquiry of management and comparing the assumptions to the prior year assumptions. (AS 1210.09 and .12; AS 2501.16)

During the year the issuer acquired a business. As part of the consideration the issuer recorded a contingent consideration liability related to the sellers' rights to receive additional shares contingent upon the exercise or conversion of convertible notes options and warrants. The firm did not identify and evaluate a departure from GAAP related to the issuer not reflecting that certain warrants had been exercised after the acquisition in its determination of the contingent consideration liability at year end. (AS 2810.30) In connection with our review the issuer reevaluated its accounting for the contingent consideration liability 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 issued an audit report on the restated financial statements. Our procedures did not include review of any additional audit work related to the restatement.

The issuer processed and recorded all transactions using two information technology ('IT') systems. The firm tested certain automated and IT-dependent manual controls that used data and reports generated or maintained by the systems. The accuracy and completeness of these data and reports depended on effective IT general controls ('ITGCs'). The firm did not identify and test controls over the accuracy and completeness of information used in the testing or operation of certain ITGCs. As a result the firm's testing of automated and IT-dependent manual controls over revenue and accounts receivable was not sufficient. (AS 2201.46)

The issuer processed and recorded all transactions using two information technology ('IT') systems. The firm tested certain automated and IT-dependent manual controls that used data and reports generated or maintained by the systems. The accuracy and completeness of these data and reports depended on effective IT general controls ('ITGCs'). The firm did not identify and test any controls intended to address the risk of management override of controls over the posting of journal entries. (AS 2201.39)

The firm selected for testing a control consisting of reviews of the reasonableness of assumptions used in the valuation of assets acquired and liabilities assumed in a business combination. 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 issuer acquired a business and engaged an external specialist to determine the fair value of an acquired intangible asset. The firm's approach for testing the fair value was to review and test management's process. The following deficiencies were identified: · The firm did not evaluate the reasonableness of the equity risk premium rate and income tax rate used by the specialist to determine the fair value of the acquired intangible asset. (AS 2502.26 and .28)

The issuer acquired a business and engaged an external specialist to determine the fair value of an acquired intangible asset. The firm's approach for testing the fair value was to review and test management's process. The following deficiencies were identified: · The firm did not sufficiently evaluate the issuer-provided operating forecast used by the specialist to value the intangible asset because its procedures were limited to inquiring of management and comparing the forecast to the issuer's historical financial information without performing procedures to evaluate whether the issuer's historical performance would be representative of the issuer's future operations. (AS 1210.12)

The firm's approach for substantively testing certain estimates was to test the issuer's process. The firm did not perform procedures to evaluate the reasonableness of certain significant assumptions the issuer used to develop the estimates including taking into account the issuer's past history of carrying out its stated intentions regarding the assumptions beyond inquiry and performing ratio analyses. (AS 2501.16 and .17)

The firm's approach for substantively testing the allowance for doubtful accounts was to develop an independent expectation of the estimate. The firm did not perform any procedures to demonstrate it had a reasonable basis for certain assumptions it developed and used in determining its independent expectation. (AS 2501.22)

The firm's internal inspection program had inspected this audit and reviewed this area but did not identify the deficiencies below. During the year after identifying impairment indicators the issuer performed a quantitative assessment of impairment. At year end the issuer performed its annual goodwill impairment assessment using a quantitative assessment. The issuer engaged a specialist to perform both assessments. The following deficiencies were identified: · The firm did not perform procedures to test the quantitative assessment of goodwill performed during the year beyond inquiry and obtaining and reading the company's specialist report. Further the firm did not perform any procedures to evaluate the work of the company's specialist. (AS 1105.A6 - .A10; AS 2501.07)

The firm's internal inspection program had inspected this audit and reviewed this area but did not identify the deficiencies below. During the year after identifying impairment indicators the issuer performed a quantitative assessment of impairment. At year end the issuer performed its annual goodwill impairment assessment using a quantitative assessment. The issuer engaged a specialist to perform both assessments. The following deficiencies were identified: · The firm did not perform sufficient procedures to evaluate the relevance of data related to comparable companies used by the company's specialist in the year-end quantitative assessment because it did not evaluate (1) the relative values of income statement accounts in concluding that the companies were comparable and (2) that the data used from certain of the comparable companies was significantly dated. (AS 1105.A8a)

The firm's internal inspection program had inspected this audit and reviewed this area but did not identify the deficiencies below. During the year after identifying impairment indicators the issuer performed a quantitative assessment of impairment. At year end the issuer performed its annual goodwill impairment assessment using a quantitative assessment. The issuer engaged a specialist to perform both assessments. The following deficiencies were identified: · The firm did not perform any procedures to evaluate the reasonableness of a significant assumption developed and used by the company's specialist in the year-end quantitative assessment. (AS 1105.A8b)

The firm's internal inspection program had inspected this audit and reviewed this area but did not identify the deficiencies below. During the year after identifying impairment indicators the issuer performed a quantitative assessment of impairment. At year end the issuer performed its annual goodwill impairment assessment using a quantitative assessment. The issuer engaged a specialist to perform both assessments. The following deficiencies were identified: · The firm did not identify and evaluate a GAAP departure related to the issuer's omission of a disclosure related to goodwill that is required by FASB ASC Topic 350 Intangibles – Goodwill and Other. (AS 2810.30 and .31)

The issuer determined that it had a single cash-generating unit (“CGU”) for purposes of evaluating intangible and long-lived assets for possible impairment and used a discounted cash flow method to determine the recoverable amount of this CGU in its annual impairment analysis. The firm's approach for substantively testing the impairment of an intangible asset was to review and test the issuer's process. The following deficiency was identified: · The firm did not sufficiently evaluate whether the method the issuer used to determine the recoverable amount of the CGU was in conformity with the applicable financial reporting framework including the requirements of International Accounting Standard (IAS) 36 Impairment of Assets because it did not evaluate whether the issuer's use of a single CGU to evaluate the intangible asset for possible impairment was appropriate and in accordance with IAS 36. (AS 2501.10)

The issuer determined that it had a single cash-generating unit (“CGU”) for purposes of evaluating intangible and long-lived assets for possible impairment and used a discounted cash flow method to determine the recoverable amount of this CGU in its annual impairment analysis. The firm's approach for substantively testing the impairment of an intangible asset was to review and test the issuer's process. The following deficiency was identified: · The firm did not perform any procedures to evaluate the reasonableness of certain significant assumptions used by the issuer to determine the recoverable amount of the CGU including the Issuer's intent and ability to carry out those assumptions. (AS 2501.16 and .17)

The firm did not identify and evaluate a departure from IFRS related to an error in the issuer's disclosure of the intangible asset within its impairment footnote in accordance with IAS 1 Presentation of Financial Statements. (AS 2810.30 and .31)

The firm did not perform procedures to evaluate whether there were indicators of potential impairment for certain long-lived assets and right of use assets beyond reading the issuer's impairment policy. (AS 2301.08)

The firm's internal inspection program had inspected this audit and reviewed this area and identified the deficiency below. The firm was instructed by the principal auditor to perform certain procedures to test various inputs including certain rates used by the issuer in the determination of a liability. The firm did not perform procedures to test the accuracy of these rates beyond comparing them to information provided by either the issuer or principal auditor. (AS 2301.08)

The firm's internal inspection program had inspected this audit and reviewed this area but did not identify the deficiency below. The firm was instructed by the principal auditor to test certain controls evaluate the severity of identified control deficiencies and communicate any deficiencies to the principal auditor upon identification. The firm did not evaluate the severity of identified control deficiencies to determine whether the deficiencies in combination with other deficiencies constituted a material weakness. (AS 2201.62)

To test revenue the firm selected for testing certain items that met specific criteria. The firm did not perform any substantive procedures to test the remaining portion of items that did not meet the specific criteria. (AS 1105.27; AS 2301.08)

To test revenue the firm selected for testing certain items that met specific criteria. The firm did not perform any substantive procedures to test certain other items affecting revenue. (AS 2301.08)

The firm observed physical inventory counts on various dates subsequent to year end. The firm did not perform any procedures to test certain identified differences in inventory quantities between the count dates and year end. (AS 2510.12)

The firm used the issuer's inventory aging report in its substantive testing of the inventory reserve. The firm did not test or test controls over the accuracy and completeness of the information included in the inventory aging report. (AS 1105.10; AS 2501.11)

The firm did not perform sufficient procedures to evaluate whether the issuer recognized certain revenue in conformity with IFRS 15 Revenue from Contracts with Customers because it did not evaluate (1) whether a series of contracted services provided to the customer constituted separate performance obligations and (2) the effect of variable consideration on the issuer's determination of the transaction price. (AS 2810.30)

The issuer held a portfolio of investment securities which were carried at fair value. The issuer recorded the fair value of certain investment securities based on prices it obtained from external pricing agencies. The following deficiencies were identified: - The firm did not identify and test any controls over the reasonableness of the prices obtained from external pricing agencies used by the issuer to determine the valuation of certain investment securities. (AS 2201.39)

The issuer held a portfolio of investment securities which were carried at fair value. The issuer recorded the fair value of certain investment securities based on prices it obtained from external pricing agencies. The following deficiencies were identified: - The sample size the firm used in its substantive procedures to test the valuation of certain investment securities 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 issuer held a portfolio of investment securities which were carried at fair value. The issuer recorded the fair value of certain investment securities based on prices it obtained from external pricing agencies. The following deficiencies were identified: - The sample size the firm used in its substantive procedures to test the valuation of certain investment securities 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's internal inspection program had inspected this audit and reviewed this area but did not identify the deficiencies below. The issuer used multiple information-technology (IT) systems to initiate process and record revenue. In its testing of controls over certain revenue the firm tested various automated and IT-dependent manual controls that used data and reports generated or maintained by these IT systems. As a result of the following deficiencies in the firm's testing of IT general controls (ITGCs) over certain of these IT systems the firm's testing of these automated and IT-dependent controls was not sufficient. (AS 2201.46)

The firm's internal inspection program had inspected this audit and reviewed this area but did not identify the deficiencies below. The issuer used multiple information-technology (IT) systems to initiate process and record revenue. The firm selected for testing certain ITGCs over user access to these IT systems. Management asserted that logical access to these IT systems was controlled through a third-party hosted IT solution used by the issuer and the firm obtained and evaluated a service auditor's report from this third-party hosted IT solution. The firm did not perform procedures to verify this assertion beyond inquiry of management and therefore the firm did not establish a basis to conclude that the logical access to these IT systems was only controlled through this third-party hosted IT solution. (AS 2201.42 and .44)

The firm's internal inspection program had inspected this audit and reviewed this area but did not identify the deficiencies below. The firm used system-generated data to substantively test certain revenue but did not test or sufficiently test controls over the accuracy and completeness of this data. (AS 1105.10)

The firm's internal inspection program had inspected this audit and reviewed this area but did not identify the deficiencies below. The firm used payment information produced by a third-party service organization used by the issuer to substantively test certain revenue but did not perform any procedures to test the accuracy and completeness of this information. (AS 2301.08)

The issuer used two service organizations to process and record dividend income. The firm's approach to testing dividend income included reliance on controls. The firm did not identify and test any complementary user controls over dividend income identified in the service auditor reports. (AS 2601.11 and .12)

In addition for one service organization the firm limited its procedures to reading the bridge letter between the date of the service auditor's report which was seven months before year end and year end. (AS 2601.16)

The sample size the firm used in certain of its substantive procedures to test dividend income was too small to provide sufficient appropriate audit evidence because these procedures were 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's approach for testing revenue included selecting a sample of transactions from certain months during the year. In determining the sample size the firm did not consider the relevant factors including the firm's established tolerable misstatement for the population the allowable risk of incorrect acceptance and the characteristics of the population of sales transactions. As a result the sample size the firm used in its test of details was too small to achieve the planned audit objective. Further the firm's selection of transactions for testing was confined to transactions from certain months of the year not the entire population of net sales. Therefore the results of these audit procedures could not be projected to the entire population. (AS 2315.16 .23 .23A and .24)

The firm's approach for testing revenue included selecting a sample of transactions from certain months during the year. In determining the sample size the firm did not consider the relevant factors including the firm's established tolerable misstatement for the population the allowable risk of incorrect acceptance and the characteristics of the population of sales transactions. As a result the sample size the firm used in its test of details was too small to achieve the planned audit objective. Further the firm's selection of transactions for testing was confined to transactions from certain months of the year not the entire population of net sales. In addition the firm did not evaluate whether all revenue recognition criteria had been met for transactions selected for testing. (AS 2301.08)

The firm's approach for testing revenue included selecting a sample of transactions from certain months during the year. The firm did not perform any substantive procedures to test the population of revenue in the remaining months of the year. (AS 2315.24)

The firm's approach for testing revenue included selecting a sample of transactions from certain months during the year. The firm did not perform any substantive procedures to evaluate the reliability of information obtained from external sources that it used to test the transactions. (AS 1105.04 and .06)

The issuer reported certain significant accounts. The following deficiency was identified: • The firm did not evaluate whether the issuer accounted for certain aspects of these accounts in conformity with GAAP. (AS 2301.08 and .11)

The issuer reported certain significant accounts. The following deficiency was identified: • The firm did not evaluate whether the method used to develop an estimate related to one of the significant accounts was in conformity with GAAP and appropriate for the nature of the account taking into account the firm's understanding of the issuer and its environment. (AS 2501.10)

The issuer reported certain significant accounts. The following deficiency was identified: • The firm did not evaluate the reasonableness of certain significant assumptions the issuer developed and used to estimate the value of the significant accounts. (AS 2501.16)

The issuer reported certain significant accounts. The following deficiency was identified: • The firm did not evaluate the reasonableness of another significant assumption the issuer used to estimate one of the significant accounts beyond comparing it to external data without evaluating the significant difference between the external data and the assumption used by the issuer. (AS 2501.16)

The issuer reported certain significant accounts. The following deficiency was identified: • The firm did not perform procedures to demonstrate that it had a reasonable basis for an expectation it developed to evaluate the reasonableness of a significant assumption used by the issuer to estimate the significant accounts. (AS 2501.16)

The issuer reported certain significant accounts. The following deficiency was identified: • The firm did not perform procedures to test the reliability of certain information it used to develop its expectation of the significant assumption. (AS 1105.04 and .06)

The issuer reported certain significant accounts. The following deficiency was identified: • The firm did not perform sufficient procedures to test the relevance of certain information used by the issuer to develop an estimate related to the significant accounts because it did not consider certain factors related to the information. (AS 1105.04 and .06)

The issuer reported certain significant accounts. The following deficiency was identified: • The firm did not identify and evaluate a departure from GAAP related to the issuer's omission of certain required disclosures related to one of the significant accounts. (AS 2810.30 and .31)

The firm did not perform procedures to evaluate whether the issuer's revenue recognition was in conformity with GAAP. (AS 2810.30)

The firm did not identify and evaluate the significance to the financial statements of the issuer's omission of certain disclosures required by GAAP. (AS 2810.30 and .31)