Explorer

The firm did not identify and appropriately address a departure from GAAP related to certain expenses that should have been presented in the issuer's financial statements as part of loss from discontinued operations in conformity with FASB ASC Topic 205-20 Discontinued Operations. (AS 2810.30 and .31)

The firm did not perform any procedures to test a significant portion of expenses classified as a loss from discontinued operations. (AS 2301.08)

The firm identified a fraud risk related to participant distributions. The firm did not perform any substantive procedures to test participant distributions beyond comparing the total amount recorded by the issuer to an amount obtained from the issuer's benefit plan recordkeeper. (AS 2301.13)

The firm selected for testing certain controls related to the issuer's reviews of a significant estimate. 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 2301.19 and .21)

The firm selected for testing controls related to the issuer's review of a certain liability account. 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 2301.19 and .21)

In addition the firm identified control deficiencies in its testing of one control but did not evaluate the severity of the deficiencies and their effect on its control risk assessment. (AS 2301.34)

The firm obtained and evaluated the service auditor's report for the issuer's system used to process and record transactions related to this liability. The firm identified and tested certain controls intended to address complementary user entity controls included in the service auditor's report. The firm identified deficiencies in these controls and identified and selected for testing a compensating control to address these deficiencies. The firm did not assess and evaluate the effect of the identified control deficiencies as the compensating control selected for testing is one of the controls described above related to the firm not evaluating review procedures performed by the control owners. (AS 2601.14)

The firm's approach for substantively testing this liability account consisted of sending negative confirmation requests. The firm's procedures did not provide sufficient appropriate audit evidence because the use of negative confirmations was not supported by the firm's risk assessment. (AS 2310.20)

The sample sizes the firm used in certain of its substantive procedures to test this liability account 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 did not test the presentation and disclosure of certain significant accounts beyond testing the mathematical accuracy of the issuer's calculations. (AS 2502.43)

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)

The firm selected for testing certain controls related to the issuer's reviews of a significant estimate. The firm did not test the design and operating effectiveness of other controls because the firm selected transactions from reports that were not used in the operation of the controls. (AS 2301.19 and .21)

The issuer acquired a business during the year and engaged an external specialist to determine the fair value of the intangible assets. The firm did not perform procedures to test the reasonableness of the issuer's forecasts used by the external specialist. (AS 1210.12)

The firm did not perform sufficient procedures to evaluate whether the issuer properly identified its related parties and relationships and transactions with related parties because the firm did not take into account information gathered during the audit. (AS 2410.14)

During the year the issuer acquired several properties. The firm did not evaluate whether the existing leases on these acquired properties were properly classified. (AS 2301.08)

The firm selected for testing a quarterly control over portions of the estimate. The firm tested this control through the second quarter but did not perform any procedures to update the results of its testing from that interim date to the issuer's year end. (AS 2301.29)

The firm identified control deficiencies in its testing of certain controls but did not evaluate the severity of the deficiencies and their effect on its control risk assessment. (AS 2301.34)

The firm obtained and evaluated the service auditor's report for the issuer's system used to process and record transactions related to this estimate. The firm identified and tested certain controls intended to address complementary user entity controls included in the service auditor's report. The firm identified deficiencies in these controls and identified and tested other controls that it believed mitigated these deficiencies. The firm however did not identify that the other controls did not address the same risks as the deficient controls. (AS 2601.14)

The firm's approach for substantively testing the estimate was to review and test management's process. The firm did not sufficiently evaluate the reasonableness of the estimate because the firm did not perform procedures to test certain assumptions used by the issuer to determine the estimate. (AS 2501.09 .10 and .11)

The firm's approach for substantively testing the estimate was to review and test management's process. The firm did not test or in the alternative test any controls over the accuracy and completeness of certain data used to determine the estimate. (AS 1105.10; AS 2501.11)

The firm performed substantive procedures to test certain factors used by the issuer to determine the estimate. The following deficiencies were identified: · The sample sizes the firm used in those procedures 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 performed substantive procedures to test certain factors used by the issuer to determine the estimate. The following deficiencies were identified: · The firm did not evaluate differences it identified in its substantive testing of certain data used by the issuer to determine the estimate. (AS 2501.09 .10 and .11)

The firm selected for testing certain information technology general controls (ITGCs) automated controls and information technology (IT) dependent manual controls that used data and reports generated or maintained by the issuer's IT systems. The following deficiencies were identified: · The firm did not obtain an understanding of how revenue transactions are recorded and processed by certain applications. (AS 2201.30)

The firm relied on controls in its approach to testing revenue. The firm did not sufficiently test controls in the revenue process because it limited its procedures to a walkthrough. (AS 2301.16)

The sample size the firm used in 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 deficiencies in the firm's control testing discussed above. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A)

The firm did not test whether the issuer appropriately identified and satisfied performance obligations prior to recognizing revenue in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2810.30)

The firm did not test the existence of certain assets and the completeness of certain liabilities. (AS 2301.08)

The firm did not test the fair value of certain accounts. (AS 2502.15)

The firm did not perform procedures to test beyond inquiry of management the inventory reserve for excess and obsolete inventory. (AS 2501.07)

The firm selected for testing certain information technology general controls (ITGCs) automated controls and information technology (IT) dependent manual controls that used data and reports generated or maintained by the issuer's IT systems. The following deficiencies were identified: · The firm selected for testing certain ITGCs that included a review element. The firm did not evaluate whether the control owners possessed the necessary authority and competence to perform the controls effectively. Further 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 selected for testing certain information technology general controls (ITGCs) automated controls and information technology (IT) dependent manual controls that used data and reports generated or maintained by the issuer's IT systems. The following deficiencies were identified: · The issuer used two service organizations for initiating processing and recording certain revenue. The firm did not obtain an understanding of and test any relevant controls at the service organization. (AS 2201.39 and .B19)

The firm selected for testing certain information technology general controls (ITGCs) automated controls and information technology (IT) dependent manual controls that used data and reports generated or maintained by the issuer's IT systems. The following deficiencies were identified: · The firm did not sufficiently test certain application controls because it tested only one instance which was not appropriate due to the deficiencies discussed above. (AS 2201.46)

The firm selected for testing certain information technology general controls (ITGCs) automated controls and information technology (IT) dependent manual controls that used data and reports generated or maintained by the issuer's IT systems. The following deficiencies were identified: · The firm did not test controls over the accuracy and completeness of data and reports used in the operation of certain controls. (AS 2201.39)

The firm selected for testing a review control over the determination that performance obligations related to revenue recognition had been met. 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 selected for testing a review control over the approval of customer change orders. 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 sample sizes the firm used in certain of its substantive procedures to test 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 deficiencies in the firm's control testing discussed above. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A)

The firm used data produced by the issuer to test certain revenue. The firm did not perform any substantive procedures to test or sufficiently test controls over the accuracy and completeness of the data. (AS 1105.10)

The firm did not perform sufficient procedures to test whether revenue was recognized in accordance with FASB ASC Topic 606 Revenue from Contracts with Customers because it did not evaluate whether contracts were negotiated as a package with a single commercial objective where the amount of consideration to be paid in one contract depended on the price or performance of the other contract or whether goods and services promised in each contract were a single performance obligation when the contracts were entered into at or near the same time with the same customer. (AS 2301.08 and .13)

The firm did not perform sufficient procedures to evaluate and test various controls in the revenue cycle because it did not: · Evaluate the review procedures 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 did not perform sufficient procedures to evaluate and test various controls in the revenue cycle because it did not: · Identify and test controls over the upload of data into certain of the issuer's applications or over the calculation of standalone selling price. (AS 2201.39)

The sample sizes the firm used in certain of its substantive procedures to test 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 deficiencies in the firm's control testing described above. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A)

The firm did not perform procedures to test the design and operating effectiveness of a control over the issuer-specific accounting considerations related to the adoption of new accounting pronouncements. (AS 2201.42 and .44)

The firm identified for testing four review controls over the issuance and repurchase of debt instruments. The firm did not evaluate the review procedures 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)

For certain debt repurchased during the year the firm did not perform any procedures to test the number of debt holders and aggregate principal amount of the repurchased debt and the fair value of consideration paid to the debt holders upon repurchase. (AS 2301.08; AS 2501.07)

For product revenue the firm did not evaluate the shipping terms to assess whether it was appropriate to recognize revenue upon shipment. (AS 2301.08 and .13)

For service revenue the firm did not evaluate whether (1) performance obligations were appropriately identified (2) the allocation of revenue between performance obligations was appropriate and (3) performance obligations were satisfied. (AS 2301.08 and .13)

The firm did not perform any procedures to test unbilled accounts receivable balances. (AS 2301.08)