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The issuer's policy was to group all of its property plant and equipment when evaluating the assets for possible impairment because the cash flows were largely interdependent. The following deficiencies were identified: · The firm selected for testing a control over the impairment of property plant and equipment which included the determination of its asset groupings. The firm did not test beyond inquiry the aspect of the control that addressed the appropriateness of the issuer's conclusion that it had one asset group. (AS 2201.42 and .44)

The issuer's policy was to group all of its property plant and equipment when evaluating the assets for possible impairment because the cash flows were largely interdependent. The following deficiencies were identified: · In concluding that the issuer's impairment assessment was reasonable the firm did not sufficiently evaluate whether the issuer's identification of one asset group was appropriate because the firm's procedures were limited to reading the issuer's memorandum documenting its conclusion that there was no impairment of property plant and equipment. (AS 2501.11)

The firm did not perform any substantive procedures to test this revenue. (AS 2301.08)

With respect to the ALL for loans that the issuer assessed collectively for impairment: The firm selected for testing controls that included a committee's review of certain assumptions used to estimate this ALL. 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)

With respect to the ALL for loans that the issuer assessed collectively for impairment: The firm selected for testing a control that consisted of the issuer's review of the assigned loan grades which included a review by senior management of the assigned loan grades for certain loans. The loan grades were an important factor in estimating this ALL. The firm did not perform procedures to test the aspect of the control related to senior management's review of the assigned loan grades beyond inspecting loan files for sign-off as evidence of review. (AS 2201.42 and .44)

With respect to the ALL for loans that the issuer assessed individually for impairment: The firm selected for testing a control that consisted of the issuer's review of loans that exceeded a loan grade threshold and the review of the impairment calculations for individually impaired loans. The firm did not evaluate the specific review procedures that the control owners performed to assess the reasonableness of certain inputs and assumptions underlying the impairment calculations for individually impaired loans. (AS 2201.42 and .44)

With respect to the ALL for loans that the issuer assessed individually for impairment: The firm selected for testing a control that consisted of the issuer's review of appraisals used to determine the fair value of the underlying collateral for collateral-dependent loans that it had determined to be individually impaired. The firm used only the work of the issuer's internal audit as evidence of the operating effectiveness of the control. This approach did not provide sufficient appropriate audit evidence that the control was operating as designed because of the amount of subjectivity involved in reviewing the appraised collateral values. (AS 2201.19; AS 2605.20 and .21)

The firm selected for testing a control that included the issuer's review of the categorization of the available-for-sale and trading securities within the fair value hierarchy as set forth in FASB ASC Topic 820 Fair Value Measurement. The firm did not perform procedures to test the aspect of the control related to assessing the appropriateness of the categorization of these securities within the fair value hierarchy. (AS 2201.42 and .44)

The firm did not perform any substantive procedures to evaluate the appropriateness of the issuer's categorization of these securities within the fair value hierarchy. (AS 2502.43)

During the year the issuer acquired a business. The firm's procedures to test the acquired deposit liabilities included sending positive confirmation requests for deposit accounts over an established threshold. For the positive confirmations that were not returned the firm did not perform alternative procedures that provided sufficient appropriate audit evidence that the recorded amounts of the acquired deposit liabilities were accurate as of the confirmation date. (AS 2310.31)

During the year the issuer acquired a business. The firm selected for testing controls that consisted of the issuer's review of the cash-flow forecasts used in the valuation of certain acquired intangible assets. The firm did not evaluate the specific review procedures that the control owners performed to assess the reasonableness of a revenue assumption underlying the cash-flow forecasts. (AS 2201.42 and .44)

The firm's approach for substantively testing the valuation of certain acquired intangible assets was to review and test management's process. The firm did not perform procedures beyond inquiring of management to evaluate the reasonableness of a revenue assumption underlying the cash-flow forecasts for any of the periods beyond the first two years of the 20-year forecast period. (AS 2502.26 .28 .31 and .36)

The issuer used multiple IT systems to initiate process and record transactions related to certain revenue and long-lived assets. The following deficiencies were identified: · The firm tested ITGCs for these IT systems. The firm selected for testing controls over change management that consisted of (1) the review and testing of planned changes to the IT systems and (2) approval of these changes prior to implementation into the production environment. The firm did not evaluate the specific procedures that the control owners performed to identify evaluate the appropriateness of and approve certain changes made to the IT systems. (AS 2201.42 and .44)

The firm selected for testing controls over these two types of revenue and the related deferred revenue. The firm did not identify and test any controls over the accuracy and completeness of certain information that the control owners used in the performance of these controls. (AS 2201.39) In connection with our review the issuer reevaluated its controls and concluded that a material weakness existed that had not been previously identified. The issuer subsequently revised its report on ICFR to reflect this material weakness and the firm modified its opinion on the effectiveness of the issuer's ICFR to express an adverse opinion and reissued its report.

The issuer used multiple IT systems to initiate process and record transactions related to certain revenue and long-lived assets. The following deficiencies were identified: · The firm did not test or in the alternative test controls over the completeness of the population of changes that were processed internally by the issuer's IT personnel and that the firm used in its testing of the controls over change management. (AS 1105.10)

The issuer used multiple IT systems to initiate process and record transactions related to certain revenue and long-lived assets. The following deficiencies were identified: · The firm tested certain automated and IT-dependent manual controls over certain revenue and long-lived assets that used information from these IT systems. As a result of the deficiencies in the firm's testing of ITGCs discussed above the firm's testing of these automated and IT-dependent manual controls was not sufficient because these controls used information generated by these IT systems. (AS 2201.46)

The firm selected for testing a control that consisted of the review of the issuer's accounting for certain revenue arrangements for conformity with GAAP. The firm did not identify and test any controls over the completeness of certain information that the control owners used in the performance of this control. (AS 2201.39)

The firm selected for testing a manual control that consisted of the review of pricing in all new and modified contracts. The sample that the firm used to test this control was too small to provide sufficient appropriate audit evidence that the control was operating effectively because it limited the sample to one contract modification. (AS 2201.44)

The firm's approach for substantively testing certain revenue consisted primarily of performing a software-assisted analysis which included performing procedures to test the accuracy of information used in this analysis. The software-assisted analysis was designed to test the relationships among revenue accounts receivable and cash that the issuer recorded through journal entries. The firm however did not perform procedures to test the appropriateness of the cash data used in this analysis. (AS 1105.10)

The firm's approach for substantively testing certain revenue consisted primarily of performing a software-assisted analysis which included performing procedures to test the accuracy of information used in this analysis. The software-assisted analysis was designed to test the relationships between revenue and cash that the issuer recorded through journal entries. The firm however did not perform procedures to test the appropriateness of the cash data used in this analysis. (AS 1105.10)

The firm's approach for substantively testing certain revenue consisted primarily of performing a software-assisted analysis which included performing procedures to test the accuracy of information used in this analysis. The software-assisted analysis was designed to test the relationships among revenue accounts receivable and cash that the issuer recorded through journal entries. The firm did not perform sufficient procedures to test the appropriateness of certain information used in this analysis because it did not perform procedures to test whether the cash receipts were relevant to the revenue being tested. (AS 1105.10)

The issuer reported its pension plan assets at fair value. The firm did not perform any substantive procedures to test the valuation of certain of the issuer's pension plan assets it had planned to test. (AS 2301.08)

The firm did not perform substantive procedures to test or test controls over the accuracy and completeness of certain information used in its substantive testing of this revenue and deferred revenue. (AS 1105.10)

During the year the issuer acquired a business. The firm selected for testing controls over the accounting for the business combination which included the issuer's review of the assumptions underlying the cash-flow forecasts used in the valuation of the acquired intangible assets. 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) In connection with our review the issuer reevaluated its controls over accounting for business combinations and concluded that a material weakness existed that had not been previously identified. The issuer subsequently revised its report on ICFR to reflect this material weakness and the firm revised its opinion on the effectiveness of the issuer's ICFR to express an adverse opinion and reissued its report.

The firm's approach for substantively testing the valuation of the acquired intangible assets was to review and test management's process. The firm performed certain comparisons to test the reasonableness of certain assumptions underlying the cash-flow forecasts that the issuer used to determine the fair value of the acquired intangible assets. The firm did not perform procedures beyond inquiring of management to evaluate the differences it identified in these comparisons. (AS 2502.26 .28 .31 and .36)

The firm's approach for substantively testing the valuation of the acquired intangible assets was to review and test management's process. The firm did not perform procedures beyond inquiring of management to evaluate the reasonableness of certain other assumptions underlying these cash-flow forecasts. (AS 2502.26 .28 .31 and .36)

The issuer used multiple information-technology ('IT') systems to initiate process and record transactions related to certain revenue and property plant and equipment. The firm tested information technology general controls ('ITGCs') for these IT systems. The following deficiencies were identified: · The firm selected for testing controls over managing developer-level access to these IT systems. The firm did not evaluate the procedures that the control owners performed to determine whether developers had the ability to migrate changes to production. (AS 2201.42 and .44)

The issuer used multiple information-technology ('IT') systems to initiate process and record transactions related to certain revenue and property plant and equipment. The firm tested information technology general controls ('ITGCs') for these IT systems. The following deficiencies were identified: · The issuer used various change management processes for these IT systems including multiple tools to manage and migrate changes into the production environments. The firm's sampling approach for testing ITGCs related to change management and segregation of duties was inappropriate because it was based on an unsupported assumption that the population of ITGCs was homogeneous. (AS 2201.46)

In the current year the issuer identified events indicating that its operating lease right-of-use assets may not be recoverable and performed an impairment analysis. The issuer determined that for certain of these assets (the 'valued assets') the fair value of the individual assets would not be impaired by more than a pre-determined percentage of the asset's recorded value (a 'maximum impairment percentage'). The following deficiencies were identified: · The firm selected for testing a control that consisted of the issuer's review of its assessment of these assets for possible impairment. The firm did not evaluate the specific review procedures that the control owner performed to assess the reasonableness of the maximum impairment percentage. (AS 2201.42 and .44)

The firm selected for testing a control that consisted of the review of forecasts used in the issuer's analyses of goodwill for possible impairment. For one of the issuer's reporting units the firm did not evaluate the specific review procedures that the control owners performed to assess the reasonableness of the forecasted revenue growth rates and gross margin percentages the issuer used in these forecasts. (AS 2201.42 and .44)

The forecasts the issuer used in its analyses to assess goodwill for possible impairment for this one reporting unit assumed significant revenue growth for certain years and improved gross margin percentages. The firm concluded that the forecasted revenue growth rates were reasonable without performing any substantive procedures to evaluate the issuer's ability to carry out certain of its planned strategies to achieve the forecasts beyond inquiring of management. The firm's procedures to test the forecasted gross margin percentages were not sufficient because they were limited to inquiring of management about the issuer's planned strategies and comparing the forecasted gross margin percentages to the actual gross margin percentages of another reporting unit. (AS 2502.26 .28 .31 and .36)

The issuer used various IT systems to initiate process and record transactions related to certain revenue and accounts receivable. The following deficiencies were identified: · The firm selected for testing a control over change management for these IT systems but did not perform sufficient procedures to test the completeness of the population of changes from which it made its selections for testing because it limited its procedures to testing the completeness of only one type of change. (AS 1105.10)

The issuer used various IT systems to initiate process and record transactions related to certain revenue and accounts receivable. The following deficiencies were identified: · The firm tested certain automated and IT-dependent manual controls that used data from these IT systems. As a result of the deficiency in the firm's testing of IT general controls discussed above the firm's testing of these automated and IT-dependent manual controls was not sufficient. (AS 2201.46)

The issuer used various IT systems to initiate process and record transactions related to certain revenue and accounts receivable. The following deficiencies were identified: · The sample sizes the firm used in certain of its substantive procedures to test this 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's approach for substantively testing certain revenue consisted primarily of performing a software-assisted analysis to test the relationships among revenue accounts receivable and cash receipts. The firm's approach to addressing the reliability of the audit evidence obtained from this type of analysis was dependent upon the firm's testing of certain controls over the data underlying the analysis and the firm's tests of details of the underlying data. The firm did not perform sufficient procedures to test and test controls over this underlying data. Specifically for one control the firm did not test (1) an aspect of the control that addressed whether the cash receipts were related to this revenue and (2) whether the control addressed all cash receipts used in this analysis. Further when performing its tests of details the firm did not select its sample from the data that was used in this analysis. (AS 1105.10)

The firm's approach for substantively testing certain revenue consisted primarily of performing a software-assisted analysis to test the relationships among revenue accounts receivable and cash receipts. The firm's approach to addressing the reliability of the audit evidence obtained from this type of analysis was dependent upon the firm's testing of certain data underlying the analysis. The firm did not sufficiently test this underlying data because it did not select its sample from the data that was used in this analysis. (AS 1105.10)

The firm's approach for substantively testing certain revenue consisted primarily of performing a software-assisted analysis to test the relationships among revenue accounts receivable and cash receipts. The firm's approach to addressing the reliability of the audit evidence obtained from this type of analysis was dependent upon the firm's testing of certain data underlying the analysis. The firm did not sufficiently test this underlying data because it tested a sample that was smaller than the one the firm determined necessary for these procedures. (AS 1105.10)

In performing its substantive testing of research and development expenses the firm planned to send positive confirmation requests to an external party that performed certain services for the issuer. The firm did not maintain control over the confirmation requests because the issuer sent the requests. Further the responses were returned by email but the firm did not consider performing procedures to verify the source of these responses. (AS 2310.28 and .29)

In the current year the issuer identified events indicating that its operating lease right-of-use assets may not be recoverable and performed an impairment analysis. The issuer determined that for certain of these assets (the 'valued assets') the fair value of the individual assets would not be impaired by more than a pre-determined percentage of the asset's recorded value (a 'maximum impairment percentage'). The following deficiencies were identified: · The firm's substantive procedures to evaluate the reasonableness of the maximum impairment percentage consisted of reading the issuer's external valuation report for certain other operating lease right-of-use assets and an external industry report. The firm did not perform procedures to evaluate whether the information in these reports was (1) relevant to the valued assets and (2) precise enough to enable the firm to identify potential material misstatements. Further the firm did not perform any procedures to evaluate whether the issuer's use of the same maximum impairment percentage for all of the valued assets was appropriate. (AS 2502.26 .28 and .31)

The issuer used information-technology (IT) systems to initiate process and record transactions related to certain inventory. The firm selected for testing certain automated controls but did not test the configuration or programming of these automated controls or perform other procedures that would have provided sufficient appropriate audit evidence that these automated controls were designed and operating effectively. (AS 2201.42 and .44)

The sample size the firm used in certain of its substantive procedures to test this inventory 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)

In addition in the substantive testing discussed above the firm identified differences in the unit costs of inventory between the issuer's inventory systems but did not perform procedures to evaluate the differences. (AS 2301.08)

The issuer used an IT system to initiate process and record transactions related to certain revenue accounts receivable and inventory. The firm selected for testing various automated controls related to this revenue accounts receivable and inventory. The following deficiencies were identified: · The firm's testing of certain automated controls using a sample of only one instance of the control's operation was not sufficient because the firm did not test the configuration or programming of these controls or perform other procedures that would have provided sufficient appropriate audit evidence that these controls were designed and operating effectively. (AS 2201.42 and .44)

The issuer used an IT system to initiate process and record transactions related to certain revenue accounts receivable and inventory. The firm selected for testing various automated controls related to this revenue accounts receivable and inventory. The following deficiencies were identified: · The firm's testing of certain other automated controls using a sample of only one instance of the control's operation was not sufficient because the firm did not test whether changes to configurations within these controls were subject to the issuer's change management controls. (AS 2201.44)

The issuer used an IT system to initiate process and record transactions related to certain revenue accounts receivable and inventory. The firm selected for testing various automated controls related to this revenue accounts receivable and inventory. The following deficiencies were identified: · The sample sizes the firm used in certain of its substantive procedures to test this revenue accounts receivable and inventory 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's approach for substantively testing certain revenue consisted primarily of performing a software-assisted analysis to test the relationships among revenue accounts receivable and cash receipts. The firm's approach to addressing the reliability of the audit evidence obtained from this type of analysis was dependent upon the firm's testing of certain data underlying the analysis. The firm did not sufficiently test this underlying data because for certain cash selections the firm did not inspect external evidence or perform other procedures to evaluate whether the cash receipts related to this revenue. (AS 1105.10)

The firm selected for testing change management controls over an information technology ('IT') application the issuer used to process and record revenue and related accounts ('revenue transactions') and goodwill. The firm did not perform procedures to test the completeness of all types of changes in the population of changes from which it made its selections. (AS 1105.10)

The firm selected for testing automated and IT-dependent manual controls over revenue transactions and goodwill that used data and reports generated by the issuer's IT application. The firm's approach to test the accuracy and completeness of the data and reports depended on effective information technology general controls ('ITGCs') including those pertaining to change management. As a result of the deficiency in the firm's testing of change management controls discussed above the firm's testing of the automated and IT-dependent manual controls over revenue transactions and goodwill was not sufficient. (AS 2201.46)

The firm selected for testing certain automated controls over the processing and recording of revenue transactions. The firm's testing of these automated controls using a sample of only one instance of the controls' operation was not sufficient because the firm did not test the configuration or programming of these controls or perform other procedures that would have provided sufficient appropriate audit evidence that these controls were designed and operating effectively. (AS 2201.42 and .44)

The firm identified deficiencies in the design and operating effectiveness of certain controls over revenue transactions. The firm concluded that these deficiencies represented a significant deficiency based on the firm's testing of various compensating controls. The firm did not sufficiently evaluate the severity of the control deficiencies over the processing and recording of revenue transactions because it did not identify that the compensating controls were dependent on the effectiveness of the deficient controls. (AS 2201.68)