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The issuer leased equipment that it then subleased to its customers. The issuer issued common stock to the lessor as payment on the lease with an opportunity for the lessor to earn additional shares of the issuer's stock if revenue milestones were met. The issuer recognized revenue from the sublease agreements net of payments to its lessor. The firm tested a sample of revenue transactions and identified differences. The firm did not (1) evaluate the nature and cause of the differences identified in its sample; (2) project applicable differences to the remaining revenue population; and (3) evaluate if the projected differences were material to the financial statements. (AS 2315.26 and .27; AS 2810.17)

In the revenue process the firm selected for testing certain information technology general controls ('ITGCs') automated controls and information technology ('IT') dependent manual controls. The following deficiencies were identified: · The firm did not identify and test controls over (1) the accuracy and completeness of information that was used in the performance of a control to verify standard terms in customer agreements; (2) superuser/administrative access to revenue systems in which various automated IT-dependent manual controls resided; (3) the accuracy and completeness of certain inputs used to recognize revenue; and (4) the determination of the units of accounting and allocation of total contract consideration to each performance obligation for contracts with multiple performance obligations. (AS 2201.39)

In the revenue process the firm selected for testing certain information technology general controls ('ITGCs') automated controls and information technology ('IT') dependent manual controls. The following deficiencies were identified: · The firm did not perform sufficient procedures to test controls over program changes for certain systems because its procedures were limited to inquiry. (AS 2201.42 and .44)

In the revenue process the firm selected for testing certain information technology general controls ('ITGCs') automated controls and information technology ('IT') dependent manual controls. The following deficiencies were identified: · The issuer used a service organization to support many of the activities of its financial reporting system. The firm did not identify and test any complementary user controls over the use of parameters over passwords. (AS 2201.B22)

In the revenue process the firm selected for testing certain information technology general controls ('ITGCs') automated controls and information technology ('IT') dependent manual controls. The following deficiencies were identified: · The firm selected for testing an automated control over segregation of duties. The firm however did not directly test the control because its procedures were limited to evaluating whether the functions assigned to employees were consistent with effective segregation of duties. (AS 2201.42 .44 and .B9)

In the revenue process the firm selected for testing certain information technology general controls ('ITGCs') automated controls and information technology ('IT') dependent manual controls. The following deficiencies were identified: · The firm identified deficiencies related to controls over reviewing user access and complementary user controls. The firm did not evaluate these deficiencies to determine if the deficiencies individually or in combination constituted material weaknesses. (AS 2201.62)

The sample sizes the firm used in certain of its substantive procedures to test revenue and related accounts 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 did not evaluate whether the revenue transactions selected for testing were recognized in in accordance with the requirements of FASB ASC Topic 606 Revenue from Contracts with Customers because the firm limited its procedures to evaluating the transactions under FASB ASC Topic 605 Revenue Recognition. (AS 2810.30)

The firm did not obtain sufficient appropriate audit evidence with regard to the issuer's inventory cycle-count procedures. Specifically the firm did not obtain an understanding of the issuer's cycle-count process test the sampling methodology and selection parameters used by the issuer or perform other procedures to evaluate whether the issuer's cycle-count procedures were sufficiently reliable to produce results substantially the same as those which would be obtained by a count of all items during the year. (AS 2510.11)

The issuer recognized revenue from multiple sources through its subsidiaries. To test revenue from two subsidiaries the firm selected revenue transactions for testing. The following deficiency was identified related to these subsidiaries: · The firm did not perform any procedures to evaluate whether (1) multiple contracts entered into at or near the same time with the same customer should be accounted for as a single contract and (2) costs associated with certain contracts were appropriately recorded as a reduction of revenue. (AS 2301.08 and .13)

The issuer recognized revenue from multiple sources through its subsidiaries. To test revenue from two subsidiaries the firm selected revenue transactions for testing. The following deficiency was identified related to these subsidiaries: · The firm did not perform procedures to evaluate whether all performance obligations were appropriately identified beyond obtaining and reading an issuer-prepared memo related to revenue recognition policies. (AS 2301.08 and .13)

The firm did not identify and evaluate a departure from GAAP related to the issuer's omission of certain revenue disclosures required by FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2810.30 and .31)

The issuer identified indicators of impairment for certain intangible assets and estimated undiscounted cash flows to assess the recoverability of those intangible assets. The following deficiency was identified: · The firm did not perform procedures to evaluate the reasonableness of certain significant assumptions including taking into account the issuer's intent and ability to carry out those assumptions. (AS 2501.16 and .17)

The issuer identified indicators of impairment for certain intangible assets and estimated undiscounted cash flows to assess the recoverability of those intangible assets. 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 data and reports it used in developing an independent expectation of another significant assumption. (AS 1105.10)

The issuer identified indicators of impairment for certain intangible assets and estimated undiscounted cash flows to assess the recoverability of those intangible assets. The following deficiency was identified: · The firm did not perform procedures to evaluate the reasonableness of certain other significant assumptions beyond comparing prior year issuer forecasted amounts to prior year actual amounts. (AS 2501.16)

The issuer recognized revenue from multiple sources. The firm did not identify and evaluate a departure from GAAP related to (1) the issuer's omission of a revenue-related disclosure required by FASB ASC Topic 280 Segment Reporting and (2) the issuer's inaccurate disclosure regarding the amount of a certain type of revenue. (AS 2810.30 and .31)

The firm's internal inspection program had inspected this audit and reviewed the Revenue and Related Accounts area and also identified certain of the deficiencies below. The firm did not perform any test of details to address the fraud risk related to the occurrence of certain revenue. (AS 2301.08 and .13)

The issuer engaged a specialist to determine the fair value of an equity investment. The firm's approach for substantively testing the fair value of the investment was to test the issuer's process and the firm used an auditor-engaged specialist to evaluate certain significant assumptions the company's specialist used. The following deficiency was identified. • The firm did not evaluate whether this was an investment in a variable interest entity that should have been consolidated by the issuer in accordance with FASB ASC Topic 810 Consolidation. (AS 2301.08 and .11)

The issuer engaged a specialist to determine the fair value of an equity investment. The firm's approach for substantively testing the fair value of the investment was to test the issuer's process and the firm used an auditor-engaged specialist to evaluate certain significant assumptions the company's specialist used. The following deficiency was identified. • The firm did not evaluate whether a certain related asset was properly classified as a current asset in accordance with FASB ASC Topic 210 Balance Sheet. (AS 2301.08 and .11)

The issuer engaged a specialist to determine the fair value of an equity investment. The firm's approach for substantively testing the fair value of the investment was to test the issuer's process and the firm used an auditor-engaged specialist to evaluate certain significant assumptions the company's specialist used. The following deficiency was identified. • The firm did not perform procedures to test the issuer's conclusion that no allowance was necessary for the related asset. (AS 2501.07)

The firm's internal inspection program had inspected this audit and reviewed the Revenue and Related Accounts area and also identified certain of the deficiencies below. The firm did not perform procedures to test or test controls over the accuracy and completeness of certain system-generated reports that it used to test certain other revenue. (AS 1105.10)

The firm's internal inspection program had inspected this audit and reviewed the Revenue and Related Accounts area and also identified certain of the deficiencies below. The firm did not perform any substantive procedures to test deferred revenue. (AS 2301.08)

The firm's approach for substantively testing the issuer's impairment analysis for certain investments was to develop an independent expectation. The following deficiency was identified. • The firm did not perform procedures to demonstrate that it had a reasonable basis for the method and assumptions it used including taking into account (1) the requirements of certain elements of the applicable financial reporting framework and (2) its understanding of the issuer's process including the issuer's use of a flat rate for impairment so that its independent expectation considered the factors relevant to the estimate. (AS 2501.21 and .22)

The firm's approach for substantively testing the issuer's impairment analysis for certain investments was to develop an independent expectation. The following deficiency was identified. • The firm did not evaluate the significant difference between its independent expectation and the issuer's recorded impairment beyond concluding that the issuer's recorded impairment was more conservative. (AS 2501.26; AS 2810.13)

The firm did not identify and evaluate a departure from GAAP related to the issuer's omission of a disclosure required by FASB ASC Topic 235 Notes to Financial Statements. (AS 2810.30 and .31) Unrelated to our review the issuer reevaluated its disclosures for investments and determined that a disclosure was omitted. The issuer subsequently corrected this omission in a restatement of its financial statements and the firm issued an audit report on the issuer's restated financial statements.

The firm's substantive procedures to test revenue included selecting a sample of revenue transactions for testing. The firm's sample was not representative of the population because the firm did not select any transactions for one type of revenue without performing procedures to determine whether all revenue transactions were homogeneous based on their characteristics. (AS 2315.16)

The firm did not evaluate whether the issuer's disclosures were in compliance with the requirements of FASB Topic ASC 606 Revenue from Contracts with Customers to disaggregate revenue into categories that depict how the nature amount timing and uncertainty of revenue and cash flows are affected by economic factors. (AS 2301.08 and .13)

The issuer engaged a specialist to determine the fair value of an equity investment. The firm's approach for substantively testing the fair value of the investment was to test the issuer's process and the firm used an auditor-engaged specialist to evaluate certain significant assumptions the company's specialist used. The following deficiency was identified. • The firm did not evaluate the reasonableness of a certain significant assumption developed by the company's specialist. (AS 1105.A8b)

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

The firm identified a fraud risk related to revenue. The firm did not perform tests of details over certain other revenue in response to the fraud risk. (AS 2301.13) Unrelated to our review the issuer reevaluated its accounting for certain revenue 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.

During the year the issuer acquired a controlling interest of a business. The firm did not perform sufficient procedures to test whether the issuer's accounting of the business combination was in conformity with FASB ASC Topic 805 because the firm did not evaluate whether the issuer (1) appropriately recorded the acquisition consideration (2) identified and appropriately recorded all assets acquired liabilities assumed and non-controlling interests and (3) measured them at their respective acquisition-date fair values. (AS 2810.30)

During the year the issuer issued shares of common stock in exchange for services rendered. The firm did not test the fair value of the shares issued. (AS 2502.15)

During the year the issuer also issued stock options for services rendered and determined their fair value using both data and assumptions. The firm did not perform any substantive procedures to test or in the alternative test controls over the accuracy and completeness of this data and evaluate the reasonableness of these assumptions. (AS 2502.26 .28 and .39)

During the year the issuer also issued stock options for services rendered and determined their fair value using both data and assumptions. The firm did not evaluate whether the fair value was properly determined from such data and assumptions. (AS 2502.39)

The firm did not perform any substantive procedures to evaluate whether the performance obligations were satisfied before revenue was recognized. (AS 2301.08)

The firm did not perform any substantive procedures to evaluate whether the performance obligation(s) was satisfied before certain revenue was recognized. (AS 2301.08)

The firm did not plan and perform an audit that provided a reasonable basis for its audit opinion on the issuer's financial statements because it limited its procedures to establishing a materiality level for the financial statements certain risk assessment procedures and an independence memorandum. (AS 1101.03; AS 1105.04; AS 2101.08 and .10; AS 2110.04; AS 2301.08; AS 2401.57; AS 2410.03; AS 2415.03; AS 2805.05; AS 2810.30 and .31)

The firm did not plan and perform an audit that provided a reasonable basis for its audit opinion on the issuer's financial statements because it limited its procedures to establishing a preliminary material level certain risk assessment procedures confirmation of a related party transaction and confirmation of shareholder listings. (AS 1101.03; AS 1105.04; AS 2101.08 and .10; AS 2105.03; AS 2110.04; AS 2301.08; AS 2401.57; AS 2410.03; AS 2415.03; AS 2810.30 and .31)

Prior to the report release date the firm did not complete all necessary audit 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 until after the report release date to evaluate whether with respect to the significant or fraud risks the (1) work was performed and documented (2) objectives of the procedures were achieved and (3) results of the procedures performed supported the conclusions reached. (AS 1105.04; AS 1201.05; AS 1215.15)

During the year the issuer acquired a business. The following deficiency was identified: · The firm did not identify and evaluate a departure from GAAP related to the issuer (1) not measuring the acquisition consideration as of the acquisition date and (2) allocating the purchase price using the book value of assets acquired and liabilities assumed which was not in conformity with FASB ASC Topic 805 Business Combinations. (AS 2810.30) Unrelated to our review the issuer reevaluated its accounting for the business combination and concluded that a material misstatement existed related to the measurement of the acquisition consideration 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.

During the year the issuer acquired a business. The following deficiency was identified: · The firm did not identify and evaluate a departure from GAAP related to the issuer's omission of certain disclosures that are required by FASB ASC Topic 805. (AS 2810.30 and .31) Unrelated to our review the issuer reevaluated its accounting for the business combination and concluded that a material misstatement existed related to the measurement of the acquisition consideration 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.

During the year the issuer acquired a business. The following deficiency was identified: · The firm did not perform any substantive procedures to determine whether the issuer identified and recorded all assets acquired. (AS 2301.08) Unrelated to our review the issuer reevaluated its accounting for the business combination and concluded that a material misstatement existed related to the measurement of the acquisition consideration 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.

Prior to the report release date the firm did not complete all necessary audit 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 until after the report release date to evaluate whether with respect to substantially all of the auditing procedures the (1) work was performed and documented (2) objectives of the procedures were achieved and (3) results of the procedures performed supported the conclusions reached. (AS 1105.04; AS 1201.05; AS 1215.15)

The firm did not perform any substantive procedures to evaluate whether the performance obligations were satisfied before certain revenue was recognized. (AS 2301.08 and .13)

The issuer engaged a specialist to determine the fair value of certain assets and liabilities using assumptions developed by the issuer and specialist. The firm's approach for substantively testing the fair value of these assets and liabilities was to test the issuer's process. The following deficiency was identified: · The firm did not perform any substantive procedures to evaluate the reliability of certain information the company's specialist used to develop certain significant assumptions. (AS 1105.A8a)

The issuer engaged a specialist to determine the fair value of certain assets and liabilities using assumptions developed by the issuer and specialist. The firm's approach for substantively testing the fair value of these assets and liabilities was to test the issuer's process. The following deficiency was identified: · The firm did not perform any substantive procedures to evaluate the reasonableness of certain significant assumptions developed and used by the company's specialist. (AS 1105.A8b)

The issuer engaged a specialist to determine the fair value of certain assets and liabilities using assumptions developed by the issuer and specialist. The firm's approach for substantively testing the fair value of these assets and liabilities was to test the issuer's process. The following deficiency was identified: · The firm did not perform any substantive procedures to evaluate the reasonableness of certain significant assumptions developed by the issuer. (AS 2501.16)

The issuer engaged a specialist to determine the fair value of certain assets and liabilities using assumptions developed by the issuer and specialist. The firm's approach for substantively testing the fair value of these assets and liabilities was to test the issuer's process. The following deficiency was identified: · The firm did not perform any substantive procedures to test the accuracy and completeness of certain issuer-produced information the company's specialist used to develop a significant assumption. (AS 1105.A8a)

The firm did not perform substantive procedures beyond inquiry to test the fair value of certain other assets and liabilities. (AS 2501.07)

The firm did not identify and evaluate departures from GAAP related to the issuer's omission of required disclosures related to certain assets and liabilities. (AS 2810.30 and .31)