Explorer

The firm did not perform any procedures to test the issuer's (1) ownership rights of these assets and (2) gain on the sale of these assets. (AS 2301.08 and .11)

The firm did not perform any procedures to test certain other liabilities at year end beyond testing the receipt of assets related to these liabilities in prior years. Further the firm did not perform any procedures to test the accrued interest related to these liabilities. (AS 2301.08)

The firm did not identify and evaluate departures from GAAP related to the issuer's omission of certain disclosures related to investment securities required by FASB ASC Topic 825 Financial Instruments. (AS 2810.30 and .31)

During the year under audit the firm identified conditions and events that caused it to believe there could be substantial doubt about the issuer's ability to continue as a going concern for a reasonable period of time and concluded that the substantial doubt was alleviated. The firm did not sufficiently evaluate management's plans because it did not assess the likelihood that the issuer could obtain additional funding and complete a business combination. (AS 2415.03)

The firm did not identify and evaluate a departure from GAAP related to the issuer's omission of a disclosure related to investment securities required by FASB ASC Topic 825. (AS 2810.30 and .31)

The firm did not identify and appropriately address a departure from GAAP related to the issuer's omission of certain required disclosures for short-term investments under FASB ASC Topic 820 Fair Value Measurement related to (1) the categorization of these investments within the fair value hierarchy and (2) a description of the valuation techniques and the inputs used in the fair value measurements. (AS 2502.43)

The issuer considered one short-term equity investment to be illiquid and expected that it would continue to be illiquid for an indefinite period. The firm did not perform any procedures to evaluate whether the issuer's accounting for the investment as a trading security was in accordance with GAAP including its classification as a current asset. (AS 2810.30 and .31)

The firm's substantive procedures to test the valuation of investment securities consisted of agreeing investments to brokerage statements. The firm did not perform any procedures to evaluate the relevance and reliability of the values included in the brokerage statements. (AS 1105.04 and .06; AS 2502.26 and .28)

The firm did not perform any procedures to test the realized gains from the sale of investments. (AS 2301.36)

For revenue that was generally earned upon receipt of the products by customers the firm selected a sample of revenue transactions from sales commission listings obtained from the issuer and performed certain substantive procedures to test revenue. The following deficiencies were identified: - The sample size the firm used 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 because the firm did not identify and test any controls over revenue. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A)

For revenue that was generally earned upon receipt of the products by customers the firm selected a sample of revenue transactions from sales commission listings obtained from the issuer and performed certain substantive procedures to test revenue. The following deficiencies were identified: - The firm did not take into account appropriate factors in determining its sample size including its established tolerable misstatement for the population the allowable risk of incorrect acceptance and the characteristics of the population. (AS 2315.16 .19 .23 and .23A)

For revenue that was generally earned upon receipt of the products by customers the firm selected a sample of revenue transactions from sales commission listings obtained from the issuer and performed certain substantive procedures to test revenue. The following deficiencies were identified: - The firm did not determine that the population of sales commission data from which the sample was drawn was appropriate for the specific audit objective of testing recorded revenue. (AS 2315.17)

For revenue that was generally earned upon receipt of the products by customers the firm selected a sample of revenue transactions from sales commission listings obtained from the issuer and performed certain substantive procedures to test revenue. The following deficiencies were identified: - The firm did not perform any substantive procedures to test or in the alternative identify and test controls over the accuracy and completeness of the population of revenue transactions from the sales commission listings used to select the sample of revenue transactions. (AS 1105.10)

For revenue that was generally earned upon receipt of the products by customers the firm selected a sample of revenue transactions from sales commission listings obtained from the issuer and performed certain substantive procedures to test revenue. The following deficiencies were identified: - The firm did not perform sufficient procedures to evaluate whether the issuer had recognized revenue in the proper period because for certain of the revenue transactions selected for testing the firm did not perform procedures to test whether revenue had been recognized after the specific products ordered were received by the customers. (AS 2301.08)

The issuer used a merchant service provider (MSP) to collect and process credit card payments from sales transactions. The funds held by the MSP were commingled with funds of its other clients and maintained in a bank account in the name of the MSP and the issuer was not authorized to withdraw the funds directly from this bank account. The firm did not perform procedures beyond inquiry of management and the MSP and reviewing the agreement between the issuer and MSP to test the presentation and disclosure of this asset. (AS 2301.08)

The firm's internal inspection program inspected this audit and reviewed these areas but did not identify the deficiencies below. During the year the issuer acquired certain businesses and engaged a specialist to assist in determining the fair value of consideration for the acquisitions and certain acquired assets. The firm used an auditor-engaged specialist to assist it with testing the fair value of the consideration for the acquisitions. The following deficiencies were identified: · The firm did not identify that the auditor-engaged specialist did not perform procedures to evaluate the relevance of certain external data the company's specialist used to develop significant assumptions. (AS 1105.A8a; AS 1210.09 and .12)

The firm's internal inspection program inspected this audit and reviewed these areas but did not identify the deficiencies below. During the year the issuer acquired certain businesses and engaged a specialist to assist in determining the fair value of consideration for the acquisitions and certain acquired assets. The firm used an auditor-engaged specialist to assist it with testing the fair value of the consideration for the acquisitions. The following deficiencies were identified: · The firm did not perform sufficient procedures to evaluate the reasonableness of certain significant assumptions because it limited its procedures to evaluating the consistency of the assumptions with industry information. Further the firm did not evaluate significant differences between the assumptions and the industry information. (AS 1105.A8b)

The firm's internal inspection program inspected this audit and reviewed these areas but did not identify the deficiencies below. The firm sent positive confirmation requests to certain customers. The following deficiencies were identified: · The firm did not perform alternative procedures for certain positive confirmation requests for which it did not receive a response. (AS 2310.31) Unrelated to our review the issuer reevaluated its accounting for accounts receivable 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 firm's internal inspection program inspected this audit and reviewed these areas but did not identify the deficiencies below. The firm sent positive confirmation requests to certain customers. The following deficiencies were identified: · For certain confirmations that were returned with exceptions the firm did not evaluate the nature of those exceptions. Further for certain other confirmations that were returned with exceptions the firm did not perform alternative procedures that provided sufficient appropriate audit evidence that recorded amounts of accounts receivable existed and were accurate at the confirmation date. (AS 2310.33) Unrelated to our review the issuer reevaluated its accounting for accounts receivable 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 firm's internal inspection program inspected this audit and reviewed these areas but did not identify the deficiencies below. 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 procedures to those journal entries. Further the firm did not examine the underlying support for the selected journal entries and instead limited its procedures to obtaining the details of the journal entries reading the journal entry descriptions and/or inquiring of management. (AS 2401.61)

The issuer used an application to process revenue transactions and maintain related data. A service organization provided software and data center hosting services related to this application. The firm did not evaluate whether the service auditor's report provided sufficient evidence because the firm did not assess the scope of the examination and applications covered the controls tested the way in which tested controls relate to the issuer's controls and the results of those tests of controls. (AS 2201.B21)

The issuer engaged an external specialist to determine the fair value of a significant account. The following deficiencies were identified: - The firm did not evaluate the relevance of certain data from sources external to the issuer that the company's specialist used to develop an assumption. (AS 1105.A8a)

The issuer engaged an external specialist to determine the fair value of a significant account. The following deficiencies were identified: - The firm did not evaluate the relevance and reliability of certain other data from sources external to the issuer that the company's specialist used to develop its assumptions. (AS 1105.A8a)

The issuer engaged an external specialist to determine the fair value of a significant account. The following deficiencies were identified: - The firm did not evaluate the reasonableness of certain significant assumptions developed by the company's specialist. (AS 1105.A8b)

The issuer engaged an external specialist to determine the fair value of a significant account. The following deficiencies were identified: - The firm did not perform sufficient procedures to evaluate certain significant assumptions developed by the issuer that the company's specialist used. Specifically beyond comparing assumptions for the current year to actual results the firm did not evaluate (1) whether the assumptions were consistent with historical and recent experience taking into account changes in conditions and events affecting the issuer and (2) the issuer's intent and ability to carry out the assumptions. (AS 2501.16 and .17)

The firm selected for testing a control that consisted of the issuer's review of revenue and was dependent on system information. The firm did not sufficiently evaluate the design of this control because the firm did not identify that the procedures that the control owner performed to ensure that the system information was accurate and complete were limited to reviewing the parameters that were applied to generate the system information. (AS 2201.42)

The issuer used an application to process revenue transactions and maintain related data. A service organization provided software and data center hosting services related to this application. The firm did not perform any procedures to ascertain whether there were any changes in the service organization's controls from the date of the service auditor's report to year end given the length of period under audit not covered by the service auditor's report. (AS 2201.39 .B24 and .B25)

The issuer used an application to process revenue transactions and maintain related data. A service organization provided software and data center hosting services related to this application. The application interfaced with a revenue recognition and reporting application. The firm selected for testing controls over change management for these applications. The firm did not evaluate whether users with access to develop program changes also had the ability to implement program changes. (AS 2201.42 and .44)

The issuer used an application to process revenue transactions and maintain related data. A service organization provided software and data center hosting services related to this application. The application interfaced with a revenue recognition and reporting application. The firm tested a control over the periodic review of access to these two applications at an interim date but did not perform any procedures to update the results of that testing from the interim date to year end. (AS 2201.55)

The firm did not perform sufficient substantive procedures to test or identify and test controls over the completeness of reports it used to make selections for testing these change management controls and certain other controls over logical access because it limited its procedures to observing the issuer generate the reports. (AS 1105.10)

The firm did not identify and test any controls over changes and privileged access to the database that supports these two applications. (AS 2201.39)

The firm tested information technology (IT) dependent manual controls that used reports generated by the two applications. The firm's approach to test the accuracy and completeness of these reports depended on effective IT general controls. In addition the firm tested certain automated application controls within the two applications as of a point in time. As a result of the above deficiencies the firm's testing of these controls was not sufficient. (AS 2201.46)

Certain of the issuer's contracts contained multiple performance obligations. The firm selected a sample of contracts for testing. The firm did not perform substantive procedures to evaluate the reasonableness of the allocation of the transaction price to the separate performance obligations for the contracts selected with multiple performance obligations. (AS 2301.08)

Certain of the issuer's contracts contained multiple performance obligations. The firm selected a sample of contracts for testing. The firm did not perform sufficient procedures to test that performance obligations were satisfied for certain of the contracts because the firm limited its procedures to obtaining reports from the issuer. (AS 2301.08)

The firm selected for testing certain controls over the reconciliation and/or review of various accounts including certain accounts related to revenue and inventory. 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 size the firm used in one of its substantive procedures to test revenue was too small to provide sufficient appropriate audit evidence because this procedure was designed based on a level of reliance on evidence from other substantive procedures that was not supported due to the deficiency in the firm's substantive analytical procedure discussed above. (AS 2315.19 .23 and .23A)

The issuer performed a quantitative assessment of impairment of certain long-lived assets and engaged an external specialist to provide information it used to develop an assumption. The firm's approach for substantively testing the impairment of long-lived assets was to test the issuer's process and the firm used an auditor-employed specialist to evaluate the methodology used by the issuer and a significant assumption the issuer developed. The following deficiency was identified: · The firm did not perform sufficient procedures to evaluate the reasonableness of a significant assumption developed by the issuer because it did not evaluate the significant difference between it and a significant assumption used by the issuer in another estimate tested. (AS 2501.16)

The issuer performed a quantitative assessment of impairment of certain long-lived assets and engaged an external specialist to provide information it used to develop an assumption. The firm's approach for substantively testing the impairment of long-lived assets was to test the issuer's process and the firm used an auditor-employed specialist to evaluate the methodology used by the issuer and a significant assumption the issuer developed. The following deficiency was identified: · The firm did not perform procedures beyond inquiry to evaluate the reasonableness of certain other significant assumptions developed by the issuer. (AS 2501.16)

The issuer performed a quantitative assessment of impairment of certain long-lived assets and engaged an external specialist to provide information it used to develop an assumption. The firm's approach for substantively testing the impairment of long-lived assets was to test the issuer's process and the firm used an auditor-employed specialist to evaluate the methodology used by the issuer and a significant assumption the issuer developed. The following deficiency was identified: · The firm did not perform procedures to evaluate whether the issuer had a reasonable basis for another significant assumption it developed. (AS 2501.16)

The issuer performed a quantitative assessment of impairment of certain long-lived assets and engaged an external specialist to provide information it used to develop an assumption. The firm's approach for substantively testing the impairment of long-lived assets was to test the issuer's process and the firm used an auditor-employed specialist to evaluate the methodology used by the issuer and a significant assumption the issuer developed. The following deficiency was identified: · The firm did not sufficiently evaluate the reasonableness of another significant assumption because it did not identify that the auditor-employed specialist did not (1) evaluate the relevance of certain internal and external information it used to evaluate the reasonableness of the assumption and (2) evaluate significant differences between the assumption and both external information it obtained and information provided by the company's specialist. Further the firm did not perform procedures to use the work of the company's specialist as audit evidence. (AS 1105.04 .06 and .A1-.A10; AS 1201.C6 and .C7; AS 2501.16)

The issuer performed a quantitative assessment of impairment of certain long-lived assets and engaged an external specialist to provide information it used to develop an assumption. The firm's approach for substantively testing the impairment of long-lived assets was to test the issuer's process and the firm used an auditor-employed specialist to evaluate the methodology used by the issuer and a significant assumption the issuer developed. The following deficiency was identified: · The firm did not sufficiently evaluate whether the method used by the issuer to perform its quantitative assessment was in conformity with International Accounting Standard (IAS) 36 Impairment of Assets because it did not identify that the auditor-employed specialist did not evaluate the effect on the quantitative assessment resulting from departures from IAS 36 it identified in the issuer's method. (AS 1201.C6 and .C7; AS 2501.10)

The issuer performed a quantitative assessment of impairment of certain long-lived assets and engaged an external specialist to provide information it used to develop an assumption. The firm's approach for substantively testing the impairment of long-lived assets was to test the issuer's process and the firm used an auditor-employed specialist to evaluate the methodology used by the issuer and a significant assumption the issuer developed. The following deficiency was identified: · The firm did not evaluate the relevance and/or reliability of certain external information it used to test the quantitative assessment. (AS 1105.04 and .06)

The issuer performed a quantitative assessment of impairment of certain long-lived assets and engaged an external specialist to provide information it used to develop an assumption. The firm's approach for substantively testing the impairment of long-lived assets was to test the issuer's process and the firm used an auditor-employed specialist to evaluate the methodology used by the issuer and a significant assumption the issuer developed. The following deficiency was identified: · The firm did not perform procedures to test or test any controls over the accuracy and completeness of issuer-produced data used by the issuer to develop a significant assumption used in its quantitative assessment. (AS 1105.10)

The firm did not evaluate the appropriateness of the presentation of certain long-lived assets. (AS 2301.08)

The issuer recognized multiple types of revenue. The following deficiency was identified: · For one type of revenue the firm did not perform procedures to evaluate whether the underlying contracts represented contracts with an identifiable customer in accordance with FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2301.08 and .13)

The firm did not identify and test any controls over (1) the accuracy and completeness of issuer-produced information used in the operation of the above controls and (2) the relevance and reliability of certain external information related to inventory used in the operation of one of the above controls. (AS 2201.39)

The issuer recognized multiple types of revenue. The following deficiency was identified: · The firm did not perform substantive procedures to evaluate the relevance and/or reliability of certain external information it used to test two types of revenue. (AS 1105.04 and.06)

The issuer recognized multiple types of revenue. The following deficiency was identified: · The firm's substantive procedures to test one type of revenue included performing substantive analytical procedures. The firm used external data in developing its expectation but did not perform any procedures to evaluate the reliability of that data. (AS 2305.16)

The issuer recognized multiple types of revenue. The following deficiency was identified: · The firm did not perform procedures to test or test any controls over the accuracy and completeness of certain issuer-produced information it used to test two types of revenue. (AS 1105.10)

The issuer reported the valuation of certain investments based on investee financial results including unaudited financial statements. The firm did not apply or request that the investor arrange with the investee to have another auditor apply appropriate auditing procedures to the unaudited financial statements for these investees. (AS 1105.63)