Explorer

The firm did not identify and test any controls over the existence of common stock. (AS 2201.39)

The firm identified a significant deficiency related to the preparation and review of the fair value of the stock options and stock compensation expense. In its evaluation of the deficiency the firm did not evaluate the severity of the deficiency in combination with other deficiencies to determine whether it constituted a material weakness. (AS 2201.62)

The issuer recognized certain of its revenue from fees that were based on the number of transactions processed each month. The firm did not perform audit procedures to test the accuracy and completeness of this data that it used in its testing of revenue. (AS 1105.10)

The issuer performed its annual goodwill and intangible assets impairment analyses using a qualitative assessment. The firm did not perform substantive procedures to evaluate the reasonableness of certain assumptions used in the qualitative assessment. Further the firm did not evaluate certain adverse events or circumstances included in the qualitative assessment in order to determine the effect on the issuer's assertions in its impairment analysis. (AS 2501.07; AS 2810.03)

The issuer engaged specialists to assist in determining the valuation of certain liabilities. The firm's approach for substantively testing these liabilities was to test the issuer's process. The following deficiency which involved two types of significant assumptions applied across multiple locations was identified: · The firm engaged an external specialist to evaluate the reasonableness of certain significant assumptions developed by the company's specialist. The firm did not identify that the auditor-engaged specialist did not evaluate the reliability of data it obtained from external sources and used to evaluate the reasonableness of these significant assumptions and perform additional procedures or request the specialist perform additional procedures to address the issue. (AS 1105.04 and .06; AS 1210.09 and .12)

The issuer engaged specialists to assist in determining the valuation of certain liabilities. The firm's approach for substantively testing these liabilities was to test the issuer's process. The following deficiency which involved two types of significant assumptions applied across multiple locations was identified: · The firm did not perform sufficient procedures to evaluate the reasonableness of certain significant assumptions developed by the issuer because it limited its procedures to inquiry and comparing the assumptions to information within certain other company specialists' reports. Further the firm did not perform procedures to evaluate the work of those company specialists. (AS 1105.A6 - .A10; AS 2501.16)

The issuer engaged specialists to assist in determining the valuation of certain liabilities. The firm's approach for substantively testing these liabilities was to test the issuer's process. The following deficiency which involved two types of significant assumptions applied across multiple locations was identified: · The firm did not perform sufficient procedures to evaluate the reasonableness of certain other significant assumptions developed by the issuer. Specifically the firm developed expectations of these assumptions using in part information in certain other company specialists' reports but did not perform procedures to evaluate the work of those company specialists. (AS 1105.A6 - .A10; AS 2501.16)

The issuer engaged specialists to assist in determining the valuation of certain liabilities. The firm's approach for substantively testing these liabilities was to test the issuer's process. The following deficiency which involved two types of significant assumptions applied across multiple locations was identified: · The firm did not perform sufficient procedures to demonstrate that it had a reasonable basis for its expectations of additional significant assumptions the issuer developed because it did not take into account the issuer's written plans or other relevant documentation. (AS 2501.16 and .17)

The issuer engaged specialists to assist in determining the valuation of certain liabilities. The firm's approach for substantively testing these liabilities was to test the issuer's process. The following deficiency which involved two types of significant assumptions applied across multiple locations was identified: · The firm did not perform any procedures to evaluate the reasonableness of other significant assumptions. (AS 2501.16)

The firm did not identify and evaluate a GAAP departure related to the issuer not reclassifying noncontrolling interests to additional paid in capital upon the exchange of equity instruments that was required by FASB ASC Topic 810 Consolidation. (AS 2810.30 and .31) Unrelated to our review the issuer reevaluated its accounting for the exchange of equity instruments 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 did not evaluate beyond reviewing issuer documentation the issuer's adoption of new accounting principles. (AS 2810.30)

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

The firm did not perform procedures to test whether the significant account was appropriately recorded. (AS 2301.08)

The firm used an issuer-prepared schedule and certain system-generated reports in certain of its substantive procedures to test this significant account but did not test the accuracy and completeness of the schedule and reports. (AS 1105.10)

The firm used issuer-prepared schedules in certain other of its substantive procedures to test this significant account but did not test the completeness of the schedules. (AS 1105.10)

The firm did not evaluate whether the financial statement presentation and disclosures associated with certain transactions were in conformity with GAAP. (AS 2810.30 and .31)

The issuer engaged a specialist to determine the fair value of certain warrants it reported as equity. The firm's approach for substantively testing the fair value of these warrants was to test the issuer's process. The firm did not evaluate the relevance of certain data the company's specialist used to develop a significant assumption. (AS 1105.A8a)

The issuer engaged a specialist to determine the fair value of certain warrants it reported as equity. The firm's approach for substantively testing the fair value of these warrants was to test the issuer's process. The firm did not evaluate the reasonableness of certain significant assumptions that the company's specialist developed. (AS 1105.A8b)

The firm did not identify and evaluate a GAAP departure related to the issuer's omission of certain disclosures required by FASB ASC Topic 820 Fair Value Measurement related to these warrants. (AS 2810.30 and .31)

Certain redeemable shares of the issuer's common stock were redeemed during the year. The firm did not perform any procedures to test the redemption price per share of the redeemed shares. (AS 2301.08)

The firm did not perform procedures beyond obtaining and reading the issuer's analysis to evaluate the issuer's conclusion that a deferred tax asset valuation allowance was not required including consideration of contradictory evidence. (AS 2501.07; AS 2810.03) Unrelated to our review the issuer reevaluated its accounting for the gross deferred tax asset and the related valuation allowance and concluded that material misstatements existed that had not been previously identified. The issuer subsequently corrected these misstatements in a restatement of its financial statements and the firm revised and reissued its report on the financial statements.

The firm did not identify and evaluate a misstatement in the amount of the gross deferred tax asset disclosed in the financial statements. (AS 2810.30 and .31) Unrelated to our review the issuer reevaluated its accounting for the gross deferred tax asset and the related valuation allowance and concluded that material misstatements existed that had not been previously identified. The issuer subsequently corrected these misstatements in a restatement of its financial statements and the firm revised and reissued its report on the financial statements.

The issuer reported in its financial statements that it had fully benefit-responsive investment contracts that were recorded at contract value. The firm did not evaluate whether these investment contracts met the criteria to be recorded at contract value in conformity with FASB ASC Topic 962 Plan Accounting —Defined Contribution Pension Plans. (AS 2810.30)

The sample size the firm used in certain of its substantive procedures to test benefits paid to participants was too small to provide sufficient appropriate audit evidence because 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 .23 and .23A)

The firm did not perform sufficient procedures to test the valuation of certain investment securities because it limited its selections to the population selected by the issuer's management and did not perform any procedures to test the valuation of the remaining population of investment securities. (AS 1105.27; AS 2301.08)

The firm did not perform sufficient procedures to evaluate whether the issuer's disclosures of investment securities was in conformity with FASB ASC Topic 962 Plan Accounting because it did not evaluate the appropriateness of the issuer's aggregation of certain securities within the disclosures. (AS 2301.08)

The issuer engaged an external pricing service to provide security pricing for its investment securities. The firm used the pricing information from this pricing provider as audit evidence. The firm did not evaluate whether the pricing information provided sufficient appropriate audit evidence because it did not evaluate the relevance and reliability of the pricing information obtained from this pricing provider. (AS 2501.20 .A2 .A4 and .A5)

The issuer held certain investments that were categorized as level 3 within the fair value hierarchy as set forth in FASB ASC Topic 820 Fair Value Measurement. The firm's approach for substantively testing the valuation of these investments was to develop independent estimates. The firm did not evaluate the relevance of the pricing information and the appropriateness of another input the firm used in developing its fair value estimates of these investments. (AS 2502.40)

The issuer reported certain equity investments and engaged specialists to estimate the fair value of these investments. The firm's approach for substantively testing the fair value of these investments was to test the issuer's process and the firm used an auditor-engaged specialist to evaluate certain significant assumptions the company's specialists used. The following deficiencies were identified: · With respect to one investment the firm did not perform any procedures to evaluate the reasonableness of certain significant assumptions the company's specialist used to estimate the fair value. (AS 2501.16)

The firm's approach for substantively testing the fair value of certain equity investments was to develop an independent expectation of the estimates using the work of an auditor-employed specialist. The firm did not perform sufficient procedures to test the fair value of these equity investments as follows: · The firm did not identify that the auditor-employed specialist did not perform procedures to demonstrate it had a reasonable basis for certain other assumptions it developed. (AS 1201.C6 and .C7; AS 2501.22)

The firm identified that the issuer's categorization of certain investments within the fair value hierarchy was not in conformity with FASB ASC Topic 820 Fair Value Measurement. The firm did not appropriately evaluate the effect of this GAAP departure on the issuer's financial statements. (AS 2810.30 and .31)

The issuer reported certain equity investments and engaged specialists to estimate the fair value of these investments. The firm's approach for substantively testing the fair value of these investments was to test the issuer's process and the firm used an auditor-engaged specialist to evaluate certain significant assumptions the company's specialists used. The following deficiencies were identified: · With respect to a second investment the firm did not sufficiently evaluate the reasonableness of certain significant assumptions developed by the company's specialist because it did not identify that the auditor-engaged specialist did not perform any procedures to evaluate the reasonableness of these assumptions. (AS 1105.A8b; AS 1210.09 and .12)

The issuer reported certain equity investments and engaged specialists to estimate the fair value of these investments. The firm's approach for substantively testing the fair value of these investments was to test the issuer's process and the firm used an auditor-engaged specialist to evaluate certain significant assumptions the company's specialists used. The following deficiencies were identified: · With respect to a second investment the auditor-engaged specialist did not sufficiently evaluate the reasonableness of another significant assumption because it did not (1) evaluate the relevance of certain external information used in its testing; (2) evaluate whether this assumption was consistent with the issuer's objectives strategies and related business risks; and (3) take into account the issuer's intent and ability to carry out its plans. (AS 1105.04 .06 and .A8b; AS 1210.09 and .12; AS 2501.17)

The issuer reported certain equity investments and engaged specialists to estimate the fair value of these investments. The firm's approach for substantively testing the fair value of these investments was to test the issuer's process and the firm used an auditor-engaged specialist to evaluate certain significant assumptions the company's specialists used. The following deficiencies were identified: · With respect to a third investment the firm did not perform sufficient procedures to test estimates that the company's specialist used to determine the investment's fair value because it did not identify that the auditor-engaged specialist did not perform any procedures with respect to the work the company's specialist performed. (AS 1210.09 and .12; AS 2501.07)

The issuer reported certain equity investments and engaged specialists to estimate the fair value of these investments. The firm's approach for substantively testing the fair value of these investments was to test the issuer's process and the firm used an auditor-engaged specialist to evaluate certain significant assumptions the company's specialists used. The following deficiencies were identified: · With respect to two other investments the firm did not sufficiently evaluate the reasonableness of certain significant assumptions developed by the company's specialists because it did not identify that the auditor-engaged specialist did not perform any procedures to evaluate the relevance and reliability of certain data the company's specialists used to develop these assumptions. (AS 1105.A8a; AS 1210.09 and .12)

The issuer reported certain equity investments and engaged specialists to estimate the fair value of these investments. The firm's approach for substantively testing the fair value of these investments was to test the issuer's process and the firm used an auditor-engaged specialist to evaluate certain significant assumptions the company's specialists used. The following deficiencies were identified: · With respect to two other investments the firm did not identify that the auditor-engaged specialist did not (1) sufficiently evaluate the reasonableness of certain of these assumptions because it did not evaluate the significant differences between the assumptions and the industry information it obtained or (2) perform any procedures to evaluate the reasonableness of the remainder of these assumptions. (AS 1105.A8b; AS 1210.09 and .12)

The issuer reported certain equity investments and engaged a specialist to estimate the fair value of these investments. The company's specialist used the investees' financial results in estimating the fair value. The firm's approach for substantively testing the fair value of these investments was to test the issuer's process and the firm used an auditor-employed specialist to evaluate the significant assumptions developed by the company's specialist. The firm did not sufficiently test the fair value of these investments as follows: · For certain of these significant assumptions the firm did not identify that the auditor-employed specialist did not (1) evaluate the reasonableness of these assumptions and (2) sufficiently evaluate the relevance of certain data from external sources the company's specialist used to develop these assumptions because the auditor-employed specialist did not evaluate the differences between these data and the issuer's investments. (AS 1105.A8a and .A8b; AS 1201.C6 and .C7)

The issuer reported certain equity investments and engaged a specialist to estimate the fair value of these investments. The company's specialist used the investees' financial results in estimating the fair value. The firm's approach for substantively testing the fair value of these investments was to test the issuer's process and the firm used an auditor-employed specialist to evaluate the significant assumptions developed by the company's specialist. The firm did not sufficiently test the fair value of these investments as follows: · The firm did not sufficiently evaluate the investees' financial results it used as audit evidence because it did not (1) perform procedures to address the difference in year ends for certain of the investees and (2) apply or request that another auditor apply appropriate auditing procedures to the unaudited financial statements for certain other investees. (AS 1105.B1 - .B3)

The firm's approach for substantively testing the fair value of certain equity investments was to develop an independent expectation of the estimates using the work of an auditor-employed specialist. The firm did not perform sufficient procedures to test the fair value of these equity investments as follows: · The firm did not identify that the auditor-employed specialist did not perform sufficient procedures to evaluate the relevance of non-industry specific data from external sources it used to develop certain assumptions because the auditor-employed specialist did not evaluate the differences between using non-industry specific data and industry-specific data. (AS 1105.04 and .06; AS 1201.C6 and .C7)

The issuer used a service organization to manage the administration and valuation of investments and this service organization used sub-service organizations for certain functions. The service auditor's report did not address the controls over the sub-service organizations. The firm did not obtain an understanding of or test any relevant controls at the sub-service organizations. (AS 2201.39 and .B19)

The firm selected for testing complementary user controls that consisted of the issuer's review of the valuation and quantity of underlying investments. The firm did not evaluate the review procedures that 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 .44 and .B22)

The firm selected for testing complementary user controls that consisted of the issuer's review of the valuation and quantity of underlying investments. The firm did not identify and test any controls over the accuracy and completeness of certain data used in the operation of these controls. (AS 2201.39)

The firm did not identify and test any controls over the issuer's review of the (1) service auditor's report and (2) presentation and disclosure of investments in the financial statements. (AS 2201.39)

The firm did not perform any substantive procedures to test the issuer's classification of certain expenses. (AS 2301.08 and .13)

The firm did not identify and test any controls that addressed the risks that the performance obligations and transaction prices were not properly identified and that revenue was not properly recognized in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2201.39) Unrelated and subsequent to our review the issuer reevaluated its accounting for revenue from customer contracts 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 revenue and concluded that material weaknesses existed that had not been previously identified. The issuer subsequently reflected these material weaknesses in a revision of its report on ICFR and the firm revised and reissued its report on ICFR to include these additional material weaknesses.

The firm did not identify and appropriately address a departure from GAAP related to the issuer's inclusion of unexercised and non-binding customer purchase options in its determination of revenue recognized from customer contracts which was not in conformity with FASB ASC Topic 606. (AS 2810.30) Unrelated and subsequent to our review the issuer reevaluated its accounting for revenue from customer contracts 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 revenue and concluded that material weaknesses existed that had not been previously identified. The issuer subsequently reflected these material weaknesses in a revision of its report on ICFR and the firm revised and reissued its report on ICFR to include these additional material weaknesses.

The issuer used direct labor costs from its timekeeping system in its actual costs incurred used to determine revenue recognition. The firm tested certain information-technology ('IT') dependent manual controls that used data from the timekeeping system but the firm did not identify and test any ITGCs or other controls over the issuer's timekeeping system. As a result the firm's testing of IT dependent manual controls was not sufficient. (AS 2201.46)

The firm selected for testing controls that consisted of reviews of a spreadsheet used to accumulate actual costs incurred and total estimated contract costs and calculate revenue recognized by contract. 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)

During the year the issuer acquired a business. The firm did not identify and test any controls over the valuation of assets acquired and liabilities assumed in a business combination. (AS 2201.39)

The firm did not perform any substantive procedures to test the fair value of inventory acquired in a business combination beyond obtaining a preliminary valuation report from the issuer-engaged specialist. (AS 2502.15)