Explorer

The issuer reported right-of-use assets and lease liabilities. The issuer performed a recoverability test to determine whether these assets were impaired that included cash flows for years beyond the terms of the leases. The firm's approach for substantively testing the recoverability test was to test the issuer's process. The firm did not perform any substantive procedures to determine whether the issuer developed the discount rate in conformity with FASB ASC Topic 842. (AS 2301.08)

The issuer reported right-of-use assets and lease liabilities. The issuer performed a recoverability test to determine whether these assets were impaired that included cash flows for years beyond the terms of the leases. The firm's approach for substantively testing the recoverability test was to test the issuer's process. The firm did not sufficiently evaluate the reasonableness of cash flow projections used in the issuer's recoverability test because it did not take into account the issuer's ability to carry out the cash flow projections including its ability to generate cash flows for the years after the end of the terms of the leases. (AS 2501.16 and .17)

The issuer reported right-of-use assets and lease liabilities. The issuer performed a recoverability test to determine whether these assets were impaired that included cash flows for years beyond the terms of the leases. The firm's approach for substantively testing the recoverability test was to test the issuer's process. The firm did not perform sufficient procedures to test whether the issuer had identified all of the lease arrangements because it did not perform any procedures to test the completeness of the issuer's list of leases. (AS 1105.10)

The issuer reported revenue from different types of services. The firm did not perform any substantive procedures to evaluate whether each type of service represented a separate performance obligation. (AS 2301.08)

The firm did not perform substantive procedures to test revenue in excess of billings beyond comparing the balance to the subsidiary ledger. (AS 2301.08)

The issuer reported goodwill for several reporting units and performed a quantitative assessment of the impairment of goodwill for each reporting unit. The firm's approach for substantively testing the quantitative assessments was to test the issuer's process. The firm did not evaluate the reliability of data from external sources the issuer used to determine certain assumptions. (AS 1105.04 and .06)

The issuer reported goodwill for several reporting units and performed a quantitative assessment of the impairment of goodwill for each reporting unit. The firm did not perform any substantive procedures to evaluate the reasonableness of certain assumptions developed by the issuer. (AS 2501.16)

The firm did not perform any substantive procedures to test certain liabilities. (AS 2301.08)

To test certain revenue the firm selected a sample of transactions. The firm did not perform substantive procedures to test whether the issuer satisfied its performance obligations for these transactions when revenue was recognized. (AS 2301.08)

To test certain revenue the firm selected a sample of transactions. The firm did not perform substantive procedures to test whether the issuer satisfied its performance obligations related to certain other revenue. (AS 2301.08)

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

The issuer engaged a specialist to perform a quantitative assessment of its goodwill. The firm did not perform substantive procedures to test the quantitative assessment beyond obtaining and reading the valuation report prepared by the company's specialist. Further the firm did not perform any procedures with respect to its use of the work of the company's specialist as audit evidence. (AS 1105.A1 - .A10; AS 2501.07)

The issuer performed an impairment analysis using one asset group of its long-lived assets. The firm did not evaluate whether the issuer appropriately determined that the one asset group represented the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets in conformity with FASB ASC Topic 360 because it did not consider that the issuer appeared to aggregate the undiscounted cash flows from different groups of assets in the analysis. (AS 2301.08; AS 2810.03)

The issuer performed an impairment analysis using one asset group of its long-lived assets. The firm did not perform substantive procedures beyond reviewing the issuer's impairment analysis to test the valuation of the long-lived assets. (AS 2501.07)

The firm did not evaluate whether the issuer properly identified its related parties and relationships and transactions with related parties. Further the firm did not evaluate whether the related party transactions were properly accounted for and disclosed in the financial statements. (AS 2410.14 and .17)

The firm did not identify and appropriately address a GAAP departure related to the issuer's omission of a related party disclosure. (AS 2810.30 and .31)

The firm identified journal entries and adjustments for testing. As part of its testing the firm documented that certain journal entry line items were not supported by proper documents and that certain of these journal entry line items did not have an appropriate business purpose. The firm did not evaluate whether the results of these procedures and other observations affected the assessment of fraud risks made throughout the audit and whether audit procedures should have been modified to respond to those risks. (AS 2810.28)

The issuer reported gains from the sales of certain discontinued operations. The issuer reclassified certain amounts from equity to the gain on disposal. The firm did not perform substantive procedures beyond reviewing the issuer's accounting memorandum to test the reclassification of certain amounts from equity to the gain on disposal. (AS 2301.08)

The firm did not perform substantive procedures to test certain revenue beyond comparing it to the issuer's information system. (AS 2301.08 and .13)

The firm did not complete all necessary procedures and obtain sufficient evidence to support the representations in the auditor's report. Specifically the firm did not review the work of engagement team members to evaluate whether (1) the work was performed and documented (2) the objectives of the procedures were achieved and (3) the results of the work support the conclusions reached. (AS 1105.04; AS 1201.05)

The firm did not perform substantive procedures to test revenue beyond comparing certain transactions to issuer-prepared documentation and cash receipts. (AS 2301.08 and .13)

During the year the issuer acquired certain businesses. The firm did not perform substantive procedures to test the acquisitions beyond testing the valuation of stock that was issued in connection with the acquisitions. (AS 2301.08)

The firm did not identify and select journal entries and other adjustments for testing to address the potential for material misstatement due to fraud. (AS 2401.58)

The firm did not perform any substantive procedures to evaluate whether the issuer's accounting for and presentation of convertible notes payable including warrants were in conformity with relevant GAAP. (AS 2301.08)

The issuer settled certain debt by issuing shares. The firm did not perform any substantive procedures to test this transaction. (AS 2301.08) Unrelated to our review the issuer reevaluated its (1) accounting for and presentation of convertible notes payable including warrants and (2) accounting for the settlement of debt 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.

The issuer recognized other income as a result of cancelling certain accrued expenses due to the expiration of the statute of limitations on such liabilities. The issuer engaged external counsel (“company's specialist”) to evaluate these claims under the local law. The firm did not perform substantive procedures to test other income beyond obtaining and reading the legal letters from the company's specialist. Further the firm did not perform any procedures with respect to its use of the work of the company's specialist as audit evidence. (AS 1105.A1 - .A10; AS 2301.08)

The firm did not perform any substantive procedures to test related party transactions. (AS 2410.12)

The firm identified that certain related party transactions may have been illegal acts and communicated the potential illegal acts to the issuer's Board of Directors. The issuer's Board of Directors engaged legal counsel (“company's specialist”) to evaluate these matters. The firm did not perform sufficient procedures to determine whether illegal acts had occurred because it limited its procedures to obtaining and reading a legal letter from the company's specialist and did not perform any procedures with respect to its use of the work of the company's specialist as audit evidence. (AS 1105.A1 - .A10; AS 2405.10 and .11)

The firm did not perform substantive procedures to test certain income statement transactions beyond obtaining and reading a legal agreement. (AS 2301.08)

The firm did not perform substantive procedures to test a second type of revenue beyond obtaining evidence that the issuer received cash for certain transactions. (AS 2301.08 and .13)

The firm did not perform substantive procedures to test investment securities beyond comparing the balance to the brokerage statement obtained from the issuer. (AS 2301.08)

The firm did not establish a materiality level for the financial statements as a whole that was appropriate in light of the particular circumstances and consideration of the relevant factors because the firm established separate materiality levels for balance sheet accounts and income statement accounts. (AS 2105.06)

The firm did not perform substantive procedures to test certain liabilities beyond obtaining the issuer's schedules and recalculating certain amounts. (AS 2301.08 and .11)

The issuer reported certain assets. The following deficiencies were identified: · The firm did not perform any substantive procedures to establish that the issuer had control and ownership of these assets. (AS 2301.08)

The issuer reported certain assets. The following deficiencies were identified: · The firm did not perform substantive procedures to test the existence valuation and completeness of these assets beyond tracing quantities and prices to schedules provided by the issuer. (AS 2301.08)

The issuer reported certain assets. The following deficiencies were identified: · The firm did not identify and evaluate a GAAP departure related to the issuer's disclosure that these assets were current assets and the issuer's classification of them as non-current assets on the balance sheet. (AS 2810.03 .30 and .31)

The issuer reported certain assets. The following deficiencies were identified: · The firm did not identify and evaluate the issuer's omission of disclosures related to the accounting policies for these assets that were required by FASB ASC Topic 235 Notes to the Financial Statements. (AS 2810.30 and .31)

The issuer reported certain assets. The following deficiencies were identified: · The firm did not evaluate whether the issuer's presentation of these assets was in conformity with GAAP. (AS 2301.08)

The firm did not perform substantive procedures to test revenue beyond comparing it to a schedule provided by the issuer. (AS 2301.08)

The firm did not identify and evaluate the issuer's omission of disclosures related to the accounting policies for revenue recognition that were required by FASB ASC Topic 235. (AS 2810.30 and .31)

For a third type of revenue the firm selected certain revenue transactions for testing. The firm did not perform substantive procedures to test those revenue transactions beyond obtaining evidence that the issuer received cash for the transactions. (AS 2301.08 and .13)

The firm did not perform substantive procedures to test a related party payable beyond inquiry and confirming the amount with the related party who was an executive officer of the issuer. (AS 2410.12)

During the year the issuer acquired several businesses and engaged a specialist to determine the fair value of the acquired intangible assets and goodwill at the acquisition dates. The following deficiencies were identified: · The firm did not perform substantive procedures to test certain acquisitions beyond obtaining and reading the issuer's accounting memorandum and the valuation reports prepared by the company's specialist. Further the firm did not perform any procedures with respect to its use of the work of the company's specialist as audit evidence. (AS 1105.A1 - .A10; AS 2301.08)

During the year the issuer acquired several businesses and engaged a specialist to determine the fair value of the acquired intangible assets and goodwill at the acquisition dates. The following deficiencies were identified: · The firm did not perform substantive procedures to test another acquisition beyond obtaining and reading the purchase agreement settlement statement and valuation report prepared by the company's specialist. Further the firm did not perform any procedures with respect to its use of the work of the company's specialist as audit evidence. (AS 1105.A1 - .A10; AS 2301.08)

During the year the issuer issued convertible notes and recorded a derivative liability related to the notes. The issuer engaged a specialist to determine the fair value of the derivative liability on the issuance date. The following deficiencies were identified: · The firm did not perform substantive procedures to test the convertible notes beyond obtaining and reading certain legal agreements including not evaluating whether the issuer's accounting for and presentation of the convertible notes and related derivative liability were in accordance with FASB ASC Topic 470 Debt and FASB ASC Topic 815 Derivatives and Hedging. (AS 2301.08)

During the year the issuer issued convertible notes and recorded a derivative liability related to the notes. The issuer engaged a specialist to determine the fair value of the derivative liability on the issuance date. The following deficiencies were identified: · The firm did not perform substantive procedures to test the valuation of the derivative liability as of the issuance date beyond obtaining and reading the company's specialist's valuation report. Further the firm did not perform any procedures with respect to its use of the work of the company's specialist as audit evidence. (AS 1105.A1 - .A10; AS 2501.07)

During the year the issuer issued convertible notes and recorded a derivative liability related to the notes. The issuer engaged a specialist to determine the fair value of the derivative liability on the issuance date. The following deficiencies were identified: · The firm did not perform any substantive procedures to test the valuation of the derivative liability at year end and the unrealized gain on the derivative liability for the year. (AS 2501.07)

During the year the issuer issued convertible notes and recorded a derivative liability related to the notes. The issuer engaged a specialist to determine the fair value of the derivative liability on the issuance date. The following deficiencies were identified: · The firm did not identify and evaluate the issuer's omission of disclosures related to the inputs and quantitative information about significant unobservable inputs used to measure the fair value of the derivative liability that were required by FASB ASC Topic 820 Fair Value Measurement. (AS 2810.30 and .31)

The firm did not identify and select journal entries and other adjustments for testing to address the potential for material misstatement due to fraud. (AS 2401.58)

The firm performed procedures to test one revenue transaction. The firm did not perform substantive procedures to test the remaining revenue transactions beyond tracing them to cash receipts and for certain of these transactions to certain fee information provided by customers for which the firm traced the underlying fee rates to customer contracts. Further the firm did not perform any procedures to evaluate certain evidence included in the work papers that indicated the issuer may have recognized revenue on the cash basis of accounting. (AS 2301.08 and .13; AS 2810.03)