Explorer

The firm selected for testing a control that consisted of the issuer's review of user access to another IT system. The firm did not identify and test any controls that addressed the risk that inappropriate changes could be made to data in this IT system by users with certain access. (AS 2201.39)

During the year the issuer implemented an IT system that was used to initiate process and record transactions related to this asset and liability. The firm did not identify and test any controls that addressed certain risks related to the configurations within this IT system. (AS 2201.39)

The firm selected for testing a control that consisted of the issuer's reconciliation of a portion of this asset and liability to supporting documentation and review of variances. The firm did not evaluate whether the control owners' review of certain variances at an aggregated level was sufficient to address the risks of material misstatement. (AS 2201.42 and .44)

The firm selected for testing an automated control over transactions related to this asset and liability. The firm did not identify and test any controls over the accuracy and completeness of certain information that was used in the operation of this automated control. (AS 2201.39)

The firm selected for testing two additional controls over transactions related to this asset and liability but did not test or test any controls over the completeness of the population of items from which it selected its samples for testing. (AS 1105.10)

The firm did not identify and test any controls that addressed certain risks related to the issuer's ability to hold or control rights to this asset. (AS 2201.39)

For one type of revenue the firm did not identify and test any controls over the issuer's identification and evaluation of contract terms that could affect revenue recognition. (AS 2201.39)

The firm's substantive procedures to test this revenue included selecting a sample of transactions for testing. For certain of the transactions selected for testing the firm did not obtain and evaluate the customer contract to assess whether revenue was appropriately recognized. (AS 2301.08)

For another type of revenue the issuer used models to estimate certain contractual adjustments. The firm selected for testing a control that consisted of the issuer's review of these models. The firm did not evaluate the specific review procedures the control owners performed to assess the reasonableness of the output of these models. (AS 2201.42 and .44)

For another type of revenue the issuer used models to estimate certain contractual adjustments. The firm selected for testing a control that consisted of the issuer's review of these models. The firm did not identify and test any controls over the accuracy and completeness of certain data that the control owners used in the operation of this control. (AS 2201.39)

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

The firm selected for testing two automated controls over certain revenue accounts receivable and inventory. The firm's testing of these automated controls was not sufficient because the firm did not test the programming of these controls or perform other procedures to test these controls that would have provided sufficient appropriate audit evidence that these 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 accounts receivable was too small to provide sufficient appropriate audit evidence because these procedures were designed based on a level of control reliance that was not supported due to the deficiencies in the firm's control testing discussed above. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A)

The firm did not evaluate whether the issuer was required to disclose the amount of goodwill allocated to reporting units with zero or negative carrying amounts in conformity with FASB ASC Topic 350 Intangibles – Goodwill and Other beyond asserting that this disclosure would not be material to the financial statements. (AS 2301.08)

During the year the issuer acquired a business and determined the fair value of certain acquired intangible assets using cash-flow forecasts. The issuer recorded subsequent adjustments to the provisional fair value of these acquired intangible assets during the measurement period. The following deficiencies were identified: · The firm selected for testing controls that consisted of the issuer's reviews of the fair value of these acquired intangible assets including the assumptions used in these cash-flow forecasts. The firm did not evaluate the specific review procedures that the control owners performed to assess (1) the reasonableness of certain of these assumptions and (2) whether the subsequent adjustments were based on new information obtained about facts and circumstances that existed as of the acquisition date. (AS 2201.42 and .44)

During the year the issuer acquired a business and determined the fair value of certain acquired intangible assets using cash-flow forecasts. The issuer recorded subsequent adjustments to the provisional fair value of these acquired intangible assets during the measurement period. The following deficiencies were identified: · The firm's approach for substantively testing the valuation of these acquired intangible assets was to test the issuer's process. The firm did not perform any procedures to evaluate the reasonableness of certain significant assumptions used in these cash-flow forecasts. (AS 2501.16)

During the year the issuer acquired a business and determined the fair value of certain acquired intangible assets using cash-flow forecasts. The issuer recorded subsequent adjustments to the provisional fair value of these acquired intangible assets during the measurement period. The following deficiencies were identified: · The firm did not perform any substantive procedures to evaluate whether the issuer's subsequent adjustments were based on new information obtained about facts and circumstances that existed as of the acquisition date. (AS 2301.08)

The issuer recognized revenue from one of its products net of rebates and other sales incentives that it estimated based on certain historical data. The firm did not sufficiently test the completeness of these data because it did not test whether these data included all contractual rebates and other sales incentives owed to the customer. (AS 1105.10)

For certain revenue and deferred revenue the firm did not perform any procedures to test or test any controls over the accuracy and/or completeness of certain system-generated data or reports the firm used in its substantive testing including substantive analytical procedures. (AS 1105.10; AS 2305.16)

The firm's procedures to test the accuracy of certain other issuer-produced data the firm used in its substantive testing of certain of this revenue consisted of selecting a sample of items for testing. The sample sizes the firm used in these substantive procedures were smaller than the ones the firm determined necessary to provide sufficient appropriate audit evidence. (AS 1105.10)

With respect to two types of revenue the following deficiencies were identified: · The firm did not identify and test any controls that addressed whether the performance obligation was satisfied before revenue was recognized. (AS 2201.39)

The firm selected for testing various controls over the processing and recording of certain revenue. The firm did not identify and test any controls over the accuracy and/or completeness of certain data and reports the control owners used in the operation of these controls. (AS 2201.39)

With respect to two types of revenue the following deficiencies were identified: · For the first type of revenue the firm did not perform any substantive procedures to test whether the performance obligation was satisfied before revenue was recognized. (AS 2301.08)

With respect to two types of revenue the following deficiencies were identified: · For the second type of revenue the firm used issuer-produced delivery data in its substantive testing but did not perform any procedures to test or test any controls over the accuracy and completeness of these data. (AS 1105.10)

The firm did not perform procedures beyond inquiring of management and reading an issuer-prepared memorandum to evaluate whether the issuer's balance sheet presentation of certain customer deposits and sales commissions was in conformity with GAAP. (AS 2301.08)

During the year the issuer acquired multiple businesses and determined the fair value of certain acquired intangible assets using cash-flow forecasts. The following deficiencies were identified: · The firm selected for testing controls that consisted of the issuer's reviews of the fair value of these acquired intangible assets including the assumptions and data used in these cash-flow forecasts. For one of these controls the firm did not evaluate the specific review procedures that the control owner performed to assess the reasonableness of certain of these assumptions. (AS 2201.42 and .44)

During the year the issuer acquired multiple businesses and determined the fair value of certain acquired intangible assets using cash-flow forecasts. The following deficiencies were identified: · The firm selected for testing controls that consisted of the issuer's reviews of the fair value of these acquired intangible assets including the assumptions and data used in these cash-flow forecasts. For one of these controls the firm did not identify and test any controls over the accuracy and completeness of certain of these data for one of these acquired businesses. (AS 2201.39)

During the year the issuer acquired multiple businesses and determined the fair value of certain acquired intangible assets using cash-flow forecasts. The following deficiencies were identified: · The firm used certain data in its substantive testing of one of these acquired businesses but did not perform any procedures to test or test any controls over the accuracy and completeness of these data. (AS 1105.10)

The issuer assigned certain loans a loan risk rating which was an important input in estimating the quantitative component of the allowance for credit losses (ACL). The firm's substantive procedures to test the reasonableness of the assigned loan risk rating for these loans included selecting a sample of loans for testing. The firm's sample was too small to provide sufficient appropriate audit evidence because in determining its sample the firm did not consider the characteristics of the population. (AS 2315.16 .23 and .23A)

The firm did not identify and evaluate a misstatement in a required disclosure under FASB ASC Topic 820 related to the carrying value of loans compared to their fair value. (AS 2810.30 and 31)

During the year the issuer entered into a transaction and engaged a specialist to assist it in determining the fair value of certain long-lived assets recorded in connection with the transaction. The following deficiencies were identified: · The firm did not identify and test any controls over the accuracy of certain issuer-produced data that the company's specialist used to determine the fair value of these long-lived assets. (AS 2201.39)

During the year the issuer entered into a transaction and engaged a specialist to assist it in determining the fair value of certain long-lived assets recorded in connection with the transaction. The following deficiencies were identified: · The firm did not test or test any controls over the accuracy of these issuer-produced data that the company's specialist used to determine the fair value of these long-lived assets. (AS 1105.A8a)

The firm selected for testing an automated control over the appropriateness of the prices that the issuer used to record revenue. The firm did not test the programming of this automated control or perform other procedures to test this control that would have provided sufficient appropriate audit evidence that the control was designed and operating effectively. (AS 2201.42 and .44)

The issuer recorded the cost of certain manufactured inventory based on the weight of the raw materials included in the inventory items. The firm did not identify and test any controls over the accuracy of these weights. (AS 2201.39)

The firm's substantive procedures to test the existence of inventory at one of the issuer's locations were not suitable because they did not provide any evidence of the quantity and physical condition of the inventory. (AS 2510.09)

The issuer used multiple service organizations to initiate process and record transactions related to mortgage servicing rights (MSRs). The valuation of MSRs was determined based on certain loan data that these service organizations provided to the issuer. The following deficiencies were identified: · The firm did not identify and test any controls over the accuracy of these data. (AS 2201.39 and .B19)

The issuer used multiple service organizations to initiate process and record transactions related to mortgage servicing rights (MSRs). The valuation of MSRs was determined based on certain loan data that these service organizations provided to the issuer. The following deficiencies were identified: · The firm did not identify and test any controls over the accuracy of these data. (AS 2201.39 and .B19)

The firm did not evaluate whether the issuer had appropriately calculated and presented certain derivative losses in the statement of cash flows. (AS 2301.08)

The firm did not identify and evaluate the issuer's omission of certain disclosures related to these derivative losses that were required under FASB ASC Topic 230 Statement of Cash Flows. (AS 2810.30 and .31)

The firm's substantive procedures to test certain revenue included selecting a sample of transactions for testing. The firm did not perform sufficient procedures to test these transactions because its procedures were limited to comparing the transactions to information from the same system from which the transactions were selected. (AS 2301.08)

The issuer assigned certain loans a loan risk rating which was an important input in estimating the quantitative component of the allowance for credit losses (ACL). The firm's substantive procedures to test the reasonableness of the assigned loan risk rating for these loans included selecting a sample of loans for testing. The firm's sample was too small to provide sufficient appropriate audit evidence because in determining its sample the firm did not consider the relationship of the sample to the relevant audit objective and the allowable risk of incorrect acceptance. (AS 2315.16 .23 and .23A)

For certain revenue the firm selected for testing a control that consisted of the issuer's reviews of monthly revenue compared to the corresponding prior-period revenue. The firm did not identify and test any controls over the accuracy and completeness of certain data that the control owners used in the operation of this control. (AS 2201.39)

To identify and select journal entries for testing the firm identified fraud characteristics and obtained a list of all journal entries with these characteristics. The firm did not perform sufficient procedures to test those journal entries because it examined the underlying support for only certain journal entries without having an appropriate rationale for limiting its testing to those certain journal entries. (AS 2401.61)

The firm selected for testing an automated control over the appropriateness of the prices that the issuer used to record revenue. The firm did not identify and test any controls over the accuracy and completeness of certain pricing data used in the operation of this control. (AS 2201.39)

The firm did not perform any substantive procedures to evaluate the appropriateness of the issuer's categorization of its investment securities within the fair value hierarchy set forth in FASB ASC Topic 820. (AS 2301.08)

To test the fair value of certain investment securities the firm selected a sample of investments for testing. The firm did not select sample items in such a way that could be expected to be representative of the population because it excluded a portion of the population when selecting sample items to test. (AS 2315.24)

The issuer used multiple information-technology (IT) systems to initiate process and record transactions related to revenue and the related deferred revenue. In its testing of controls over these accounts the firm tested various automated and IT-dependent manual controls that used data and reports generated or maintained by these IT systems. As a result of the following deficiencies in the firm's testing of IT general controls (ITGCs) the firm's testing of these automated and IT-dependent manual controls was not sufficient. (AS 2201.46) In connection with our review the issuer reevaluated its controls over revenue including IT controls and concluded that material weaknesses existed that had not been previously identified. The issuer subsequently reflected these material weaknesses in a revision to its report on ICFR and the firm revised and reissued its report on the effectiveness of the issuer's ICFR to include these additional material weaknesses.

Certain of the issuer's revenue arrangements included multiple performance obligations. The issuer allocated the total transaction price for each of these arrangements to the separate performance obligations based on the relative standalone selling prices. The relative standalone selling prices were determined based in part on the issuer's categorization of its product offerings and pricing discounts it offered its customers. The following deficiencies were identified: · The firm selected for testing a control that included the issuer's review and approval of the selling price data used to determine the standalone selling prices. The firm did not evaluate the specific review procedures that the control owners performed to evaluate exceptions identified for certain items that were selected for testing. (AS 2201.44) In connection with our review the issuer reevaluated its controls over revenue including IT controls and concluded that material weaknesses existed that had not been previously identified. The issuer subsequently reflected these material weaknesses in a revision to its report on ICFR and the firm revised and reissued its report on the effectiveness of the issuer's ICFR to include these additional material weaknesses.

Certain of the issuer's revenue arrangements included multiple performance obligations. The issuer allocated the total transaction price for each of these arrangements to the separate performance obligations based on the relative standalone selling prices. The relative standalone selling prices were determined based in part on the issuer's categorization of its product offerings and pricing discounts it offered its customers. The following deficiencies were identified: · The firm selected for testing a control that included the issuer's review and approval of the selling price data used to determine the standalone selling prices. The firm did not identify and test any controls over the accuracy and completeness of a system-generated report that the control owners used in the operation of this control. (AS 2201.39) In connection with our review the issuer reevaluated its controls over revenue including IT controls and concluded that material weaknesses existed that had not been previously identified. The issuer subsequently reflected these material weaknesses in a revision to its report on ICFR and the firm revised and reissued its report on the effectiveness of the issuer's ICFR to include these additional material weaknesses.

The firm selected for testing a control over the automated recognition of certain revenue when electronic delivery occurred. The firm did not identify and test any controls over the accuracy and completeness of the electronic delivery dates used in the operation of this control. (AS 2201.39) In connection with our review the issuer reevaluated its controls over revenue including IT controls and concluded that material weaknesses existed that had not been previously identified. The issuer subsequently reflected these material weaknesses in a revision to its report on ICFR and the firm revised and reissued its report on the effectiveness of the issuer's ICFR to include these additional material weaknesses.