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The issuer engaged valuation specialists to determine the fair value of the collateral for impaired loans. The following deficiency was identified: · The firm did not test the accuracy and completeness of certain issuer-produced data used by the company's specialists. (AS 1105.A8a)

The issuer engaged valuation specialists to determine the fair value of the collateral for impaired loans. The following deficiency was identified: · The firm did not evaluate the relevance and reliability of certain data from external sources used by the company's specialists. (AS 1105.A8a)

The firm did not evaluate whether the issuer recognized certain elements of an income statement account in conformity with GAAP. (AS 2810.30)

The firm's approach for testing one type of revenue included performing tests of details for a sample of transactions from one day during the year. The firm did not perform any procedures to test the population of transactions in the remaining days of the year. (AS 2315.24)

The firm did not perform procedures to test or test controls over the accuracy of certain system-generated data that it used to test certain revenue. (AS 1105.10)

The firm identified fraud criteria for journal entries and obtained a listing of all journal entries that met the criteria. The firm did not perform sufficient substantive procedures to test those journal entries because it limited its procedures to certain journal entries without having an appropriate rationale for limiting its testing to those journal entries. (AS 2401.61)

The firm's approach for testing one type of revenue included performing tests of details for a sample of transactions from one day during the year. The firm did not perform sufficient procedures to test the transaction price for the sample of transactions because it limited its procedures to testing that the issuer received certain cash. (AS 2301.08 and .13)

The firm's approach for testing a second type of revenue included performing tests of details for a sample of transactions. The firm identified differences in its testing for certain transactions. The firm did not (1) consider the nature and cause of the differences; (2) project the differences to the remaining revenue population; and (3) evaluate the results and take appropriate action. (AS 2315.26 .27 and .28)

The firm did not perform any substantive procedures to test a third type of revenue. (AS 2301.08 and .13)

The firm's approach for substantively testing the allowance for doubtful accounts was to develop an independent expectation. The following deficiency was identified: · The firm did not perform procedures to test or test controls over the accuracy of certain data it used to develop its independent expectation. (AS 1105.10)

The firm's approach for substantively testing the allowance for doubtful accounts was to develop an independent expectation. The following deficiency was identified: · 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 approach for substantively testing the allowance for doubtful accounts was to develop an independent expectation. The following deficiency was identified: · The firm did not compare its independent expectation to the issuer's recorded allowance for doubtful accounts and evaluate the difference. (AS 2501.26; AS 2810.13)

The firm sent positive confirmation requests for cash and cash equivalents balances and used an external party to receive the confirmation responses. The firm did not maintain control of the confirmation responses through direct communication with the intended recipients of the confirmation requests. (AS 2310.28)

The firm identified fraud criteria for journal entries and obtained a listing of all journal entries that met the criteria. The firm did not perform sufficient substantive procedures to test those journal entries because it limited its procedures to certain journal entries without having an appropriate rationale for limiting its testing to those journal entries. (AS 2401.61)

The firm did not perform procedures to evaluate the reasonableness of a significant assumption the issuer developed to estimate a significant account beyond comparing the amount to a contract executed in the prior year. (AS 2501.16)

The firm did not perform procedures beyond inquiry to test the appropriateness of a disclosure related to this significant account. (AS 2301.08)

The issuer entered into agreements with counterparties some of whom were related parties to provide services to the issuer's customers. The issuer charged the counterparties a nonrefundable fee which the issuer recorded as revenue at the time of the agreement for facilitating the arrangement between the counterparty and the customer. The firm did not evaluate whether all of the criteria for revenue recognition under FASB ASC Topic 605 Revenue Recognition had been met including whether (1) services had been performed and (2) collectability was reasonably assured. (AS 2301.08; AS 2810.30)

The firm did not evaluate (1) the fair value at the grant date of restricted common stock issued to employees and (2) whether stock-based compensation expense for all restricted common stock granted to employees was complete and appropriately recognized in conformity with FASB ASC Topic 718 Compensation — Stock Compensation. (AS 2502.26 and .28 AS 2810.30)

The issuer also recorded a note receivable from a shareholder secured by shares of restricted common stock. The firm did not evaluate whether the transaction should have been accounted for as stock-based compensation expense in conformity with FASB ASC Topic 718. (AS 2810.30)

The issuer entered into agreements in which it agreed to issue stock-based instruments to employees. The issuer represented to the firm that no instruments were outstanding under these agreements and no compensation expense had been recorded related to the agreements. The firm did not evaluate whether a grant date had occurred upon which compensation would be measured and recognition of compensation expense would begin in conformity with FASB ASC Topic 718. (AS 2810.30)

Under the terms of certain of the agreements with counterparties under which the issuer recorded revenue discussed above the issuer's payment to the counterparties in some cases included stock-based instruments of the issuer or related entities. The firm did not evaluate whether the stock-based instruments issued or promised to be issued to such counterparties were appropriately recognized and disclosed in the financial statements in conformity with FASB ASC Topic 505 Equity. (AS 2810.30) Unrelated and prior to our review the issuer reevaluated its accounting for stock-based compensation and the related effect on income tax 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 merged with its previous parent company in a business combination of entities under common control. The firm did not evaluate whether the merger was recognized and measured appropriately in conformity with FASB ASC Topic 805 Business Combinations. (AS 2810.30)

The issuer merged with its previous parent company in a business combination of entities under common control. The firm did not identify and evaluate the significance of a departure from GAAP related to the issuer's omission of certain disclosures required by FASB ASC Topic 805 including (1) comparative financial statements retrospectively adjusted as though the merger had occurred at the beginning of the prior period and (2) the method of accounting for the transfer of net assets or exchange of equity interests. (AS 2810.30 and.31)

The issuer entered into agreements with counterparties some of whom were related parties to provide services to the issuer's customers. The issuer charged the counterparties a nonrefundable fee which the issuer recorded as revenue at the time of the agreement for facilitating the arrangement between the counterparty and the customer. With respect to the counterparty agreements with related parties discussed above the firm did not (1) obtain an understanding of the business purpose of the transactions; (2) evaluate whether the issuer had properly identified all related parties and relationships and transactions with related parties; and (3) evaluate whether all related party transactions were disclosed in conformity with FASB ASC Topic 850 Related Party Disclosures. (AS 2410.03 .12 .14 and .17)

The issuer's accounts receivable from related and unrelated parties consisted of nonrefundable fees from agreements discussed above which had payment terms beyond one year. The firm did not evaluate the assumptions the issuer used in estimating the allowance for doubtful accounts. (AS 2501.07)

The issuer's accounts receivable from related and unrelated parties consisted of nonrefundable fees from agreements discussed above which had payment terms beyond one year. The firm did not evaluate whether the issuer's accounts receivable that were not expected to be collected within 12 months should have been classified as non-current assets in conformity with FASB ASC Topic 310 Receivables. (AS 2810.30)

The issuer entered into an agreement with a related party in which the issuer was to receive quarterly fees from the related party. Since the inception of the agreement the quarterly fees were recorded as receivables and deferred revenue in the issuer's balance sheet. The issuer disclosed that its sole officer and director was also the beneficial owner of and controlled the related party. The firm did not: · Obtain an understanding of the business purpose (or lack thereof) of the transaction. (AS 2410.03)

The issuer entered into an agreement with a related party in which the issuer was to receive quarterly fees from the related party. Since the inception of the agreement the quarterly fees were recorded as receivables and deferred revenue in the issuer's balance sheet. The issuer disclosed that its sole officer and director was also the beneficial owner of and controlled the related party. The firm did not: · Take the transaction into account in its identification of significant unusual transactions. (AS 2401.66)

The issuer entered into an agreement with a related party in which the issuer was to receive quarterly fees from the related party. Since the inception of the agreement the quarterly fees were recorded as receivables and deferred revenue in the issuer's balance sheet. The issuer disclosed that its sole officer and director was also the beneficial owner of and controlled the related party. The firm did not: · Evaluate the financial capability of the related party with respect to the outstanding receivable balance. (AS 2410.12)

The issuer entered into an agreement with a related party in which the issuer was to receive quarterly fees from the related party. Since the inception of the agreement the quarterly fees were recorded as receivables and deferred revenue in the issuer's balance sheet. The issuer disclosed that its sole officer and director was also the beneficial owner of and controlled the related party. The firm did not: · Evaluate whether the issuer's accounting for and disclosure of the transaction was appropriate. (AS 2410.17)

During the audit the firm was aware of information concerning possible illegal acts committed by the issuer and an officer. The firm did not obtain an understanding of the nature of the acts the circumstances in which they occurred and sufficient other information to evaluate the effect on the financial statements. (AS 2405.07 and .10)

The issuer's general reserve component of the ALL included a qualitative reserve component. In determining the qualitative reserve component the issuer used loan risk grades and basis point adjustments for qualitative factors. The following deficiencies were identified: - The firm identified and tested a control over the review of loan risk grades for loans that met certain criteria. The firm did not identify and test any controls over the review of loan risk grades for loans that did not meet the criteria. (AS 2201.39)

The issuer's general reserve component of the ALL included a qualitative reserve component. In determining the qualitative reserve component the issuer used loan risk grades and basis point adjustments for qualitative factors. The following deficiencies were identified: - The firm selected for testing a control that included the issuer's review of certain loans for potential impairment. The firm did not evaluate the specific review procedures that the control owners performed to review the loans for potential impairment. (AS 2201.42 and .44)

The issuer's general reserve component of the ALL included a qualitative reserve component. In determining the qualitative reserve component the issuer used loan risk grades and basis point adjustments for qualitative factors. The following deficiencies were identified: - The firm selected for testing a control that consisted of the issuer's review of the ALL including an evaluation of the qualitative reserve component. The firm did not evaluate the specific review procedures that the control owners performed to evaluate the reasonableness of the basis points for certain qualitative factors used to determine the qualitative reserve component. (AS 2201.42 and .44)

The issuer's general reserve component of the ALL included a qualitative reserve component. In determining the qualitative reserve component the issuer used loan risk grades and basis point adjustments for qualitative factors. The following deficiencies were identified: - The firm did not identify and test any controls over the accuracy of a system-generated report used in the operation of a control. (AS 2201.39)

The issuer's general reserve component of the ALL included a qualitative reserve component. In determining the qualitative reserve component the issuer used loan risk grades and basis point adjustments for qualitative factors. The following deficiencies were identified: - The firm's approach for substantively testing the ALL was to review and test management's process. With respect to certain qualitative components of the ALL the firm did not evaluate whether the issuer had a reasonable basis for the basis points used and for its selection of basis points from a range of potential basis points. (AS 2501.16)

The issuer's general reserve component of the ALL included a qualitative reserve component. In determining the qualitative reserve component the issuer used loan risk grades and basis point adjustments for qualitative factors. The following deficiencies were identified: - The sample size the firm used in its substantive procedures to test the reasonableness of loan risk grades 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 issuer used certain qualitative factors to determine the qualitative reserve component of the ACLL. The firm selected for testing a control over the issuer's review of the qualitative reserve component. The firm did not evaluate the specific review procedures that the control owner performed to (1) evaluate the reasonableness of the assumptions used to develop the qualitative reserve component and (2) test the accuracy and completeness of the data used in the operation of the control. (AS 2201.42 and .44)

The issuer used certain qualitative factors to determine the qualitative reserve component of the ACLL. The firm selected for testing a control over the issuer's review of the qualitative reserve component. The firm's approach for substantively testing the qualitative component of the ACLL was to test the issuer's process. The firm did not perform any procedures to evaluate the reasonableness of significant assumptions used by the issuer to develop the qualitative component of the ACLL. (AS 2501.16)

The firm did not select journal entries and other adjustments that met its identified fraud characteristics for testing. (AS 2401.61)

The firm selected for testing certain controls that consisted of the issuer's review of the ACLL. The firm did not evaluate the specific review procedures that the control owners performed to (1) evaluate the reasonableness of the assumptions used to develop the ACLL and (2) test the accuracy and completeness of the data used in the operation of these controls. (AS 2201.42 and .44)

The firm's approach for substantively testing the ACLL was to test the issuer's process. The firm did not perform any procedures to evaluate the reasonableness of significant assumptions used by the issuer to develop the ACLL. (AS 2501.16)

The firm did not perform any procedures to evaluate whether the issuer's disclosure of the credit quality of certain accounts receivable was in conformity with FASB ASC Topic 326 Financial Instruments — Credit Losses. (AS 2810.30 and .31)

The firm did not perform procedures to evaluate whether the issuer's classification of certain accounts receivable as current assets was in conformity with FASB ASC Topic 210 Balance Sheet. (AS 2810.30 and .31)

The issuer engaged a specialist to determine a current estimate of expected credit losses. The company's specialist determined expected credit losses by evaluating certain receivables on a collective (pool) basis. The firm did not perform sufficient procedures to evaluate whether this method was consistent with the requirements of FASB ASC Topic 326 because the firm did not consider certain specific risk characteristics of a receivable included in the pool including its size vintage and external credit rating. (AS 1105.A8c)

The firm did not identify and test any controls to support its opinion on the effectiveness of ICFR. (AS 2201.39)

The firm did not identify and test any controls to support its opinion on the effectiveness of ICFR. (AS 2201. 39)

In addition the firm did not identify and address inconsistencies between the firm's unqualified opinion on ICFR and management's report on ICFR which identified multiple material weaknesses. (AS 2201.72 .73 and .C2)

The firm did not perform any procedures to test revenue recognition beyond documenting invoices were checked for certain revenue transactions. (AS 2301.08 and .11)

In addition the firm did not identify and evaluate a departure from GAAP related to the omission of certain disclosures required by FASB ASC Topic 235 Notes to Financial Statements and FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2810.30 and .31)