Explorer

The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. The issuer entered into a significant transaction during the year. The following deficiencies were identified: · The firm did not perform procedures to evaluate the accounting for the transaction including the subsequent accounting. (AS 2301.08)

The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. The issuer entered into a significant transaction during the year. The following deficiencies were identified: · The firm did not perform procedures to evaluate the presentation and disclosures related to the transaction. (AS 2301.08)

The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. The issuer entered into a significant transaction during the year. The following deficiencies were identified: · The firm did not evaluate the business purpose (or lack thereof) of the transaction that appeared unusual due to its timing size or nature including whether it may have been entered into to engage in fraudulent financial reporting or conceal misappropriation of assets given certain facts indicating the transaction was significant and unusual. (AS 2401.67)

The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. The firm did not evaluate whether the issuer had properly identified its related parties and relationships and transactions with related parties including testing the accuracy and completeness of the related parties and relationships and transactions with related parties identified by the issuer. (AS 2410.14)

The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. The firm did not identify and evaluate a departure from GAAP related to the issuer's omission of certain disclosures required under FASB ASC Topic 850 Related Party Disclosures. (AS 2410.17; AS 2810.30 and .31)

For certain revenue the firm did not sufficiently evaluate whether there was a contract with a customer. Specifically the firm did not assess whether it was probable that the issuer would collect substantially all of the consideration to which it would be entitled in exchange for the goods or services that would be transferred to the customer before revenue was recognized including consideration of contradictory evidence. (AS 2301.08 and .13; AS 2810.03)

The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. With respect to certain other revenue the firm vouched monthly total cash receipts for certain payment methods for certain months to bank statements and for the remaining months selected three cash receipts per month and vouched them to bank statements. The firm did not: · Perform any procedures to test whether the performance obligations had been satisfied before revenue was recognized; (AS 2301.08 and .13)

The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. With respect to certain other revenue the firm vouched monthly total cash receipts for certain payment methods for certain months to bank statements and for the remaining months selected three cash receipts per month and vouched them to bank statements. The firm did not: · Evaluate the relevance of the cash receipts information that was used in its testing; (AS 1105.04 and .06)

The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. With respect to certain other revenue the firm vouched monthly total cash receipts for certain payment methods for certain months to bank statements and for the remaining months selected three cash receipts per month and vouched them to bank statements. The firm did not: · Perform any procedures to test contra revenue. (AS 2301.08 and .13)

The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. With respect to another type of revenue the firm (1) obtained an issuer-produced summary of daily sales reports for the year and compared the total sales to the general ledger and (2) vouched total cash receipts recorded for the year in the general ledger for that type of revenue to bank statements noting a difference between the amounts. The firm did not: · Perform any procedures to test whether the performance obligations had been satisfied before revenue was recognized; (AS 2301.08 and .13)

The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. With respect to another type of revenue the firm (1) obtained an issuer-produced summary of daily sales reports for the year and compared the total sales to the general ledger and (2) vouched total cash receipts recorded for the year in the general ledger for that type of revenue to bank statements noting a difference between the amounts. The firm did not: · Perform any procedures to evaluate the difference identified between total cash receipts for this type of revenue and revenue recorded in the general ledger; (AS 2301.08 and .13)

The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. With respect to another type of revenue the firm (1) obtained an issuer-produced summary of daily sales reports for the year and compared the total sales to the general ledger and (2) vouched total cash receipts recorded for the year in the general ledger for that type of revenue to bank statements noting a difference between the amounts. The firm did not: · Evaluate the relevance of the cash receipts information that was used in its testing. (AS 1105.04 and .06)

The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. The firm sent positive confirmation requests to the issuer's customers for a sample of accounts receivable. The firm did not perform sufficient alternative procedures to determine that the recorded amounts of the accounts receivable existed as of the year end because the procedures were limited to tracing to internal documents indicating the date of product delivery. (AS 2310.31)

The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. The issuer entered into a significant transaction during the year. The following deficiencies were identified: · The firm did not perform any procedures to test the valuation of aspects of the transaction. (AS 2501.07)

The firm's internal inspection program inspected this audit and reviewed this area but did not identify the deficiencies below. The issuer engaged a specialist to determine the fair value of certain assets using assumptions developed by the issuer and the specialist. The firm's approach for substantively testing the fair value of these assets was to test the issuer's process. The following deficiencies were identified: · The firm did not perform sufficient substantive procedures to evaluate the reasonableness of certain significant assumptions developed by the issuer because the firm did not evaluate whether the issuer had a reasonable basis for the assumptions. (AS 2501.16)

The firm's internal inspection program inspected this audit and reviewed this area but did not identify the deficiencies below. The issuer engaged a specialist to determine the fair value of certain assets using assumptions developed by the issuer and the specialist. The firm's approach for substantively testing the fair value of these assets was to test the issuer's process. The following deficiencies were identified: · The firm did not perform any substantive procedures to evaluate the reasonableness of another significant assumption developed by the issuer. (AS 2501.16)

The firm's internal inspection program inspected this audit and reviewed this area but did not identify the deficiencies below. The issuer engaged a specialist to determine the fair value of certain assets using assumptions developed by the issuer and the specialist. The firm's approach for substantively testing the fair value of these assets was to test the issuer's process. The following deficiencies were identified: · The firm did not perform any substantive procedures to evaluate the reasonableness of certain significant assumptions developed by the specialist. (AS 1105.A8b)

The firm's internal inspection program inspected this audit and reviewed this area but did not identify the deficiencies below. The issuer engaged a specialist to determine the fair value of certain assets using assumptions developed by the issuer and the specialist. The firm's approach for substantively testing the fair value of these assets was to test the issuer's process. The following deficiencies were identified: · The firm did not perform any substantive procedures to test the accuracy and completeness of certain information the issuer used to develop a significant assumption. (AS 1105.10)

The firm's internal inspection program inspected this audit and reviewed this area but did not identify the deficiencies below. The issuer engaged a specialist to determine the fair value of certain assets using assumptions developed by the issuer and the specialist. The firm's approach for substantively testing the fair value of these assets was to test the issuer's process. The following deficiencies were identified: · The firm did not perform any substantive procedures to test the accuracy and completeness of information the specialist used to determine the fair value of certain assets. (AS 1105.A8a)

The issuer used various models methodologies and assumptions to determine the estimate. The following deficiencies were identified: · The firm did not identify and test any controls over the monitoring of the models to determine whether the models remained suitable for their intended purpose or if revisions to the models were necessary. (AS 2201.39)

The issuer reported revenue from multiple sources. For one source of revenue the firm did not test or in the alternative test any controls over the accuracy and completeness of data used by the issuer to calculate the revenue. (AS 1105.10)

The firm sent positive confirmation requests to the issuer's customers for a sample of billed accounts receivable. For 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 receivables were accurate as of the confirmation date. (AS 2310.31)

The firm selected certain other billed account receivables and agreed the customer balances to issuer-generated invoices. The firm did not perform any procedures to evaluate the relevance and/or reliability of the invoices it used to test such receivables. (AS 1105.04 and .06)

The firm did not sufficiently test unbilled receivables because the firm did not perform procedures to test such receivables beyond comparing certain unbilled balances as of an interim date to the respective balances at year end. (AS 2301.08)

The issuer used various models methodologies and assumptions to determine the estimate. The following deficiencies were identified: · The firm selected for testing certain controls that consisted of the review of certain methodologies and assumptions used by the issuer to determine the estimate. 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)

The issuer used various models methodologies and assumptions to determine the estimate. The following deficiencies were identified: · The firm selected for testing change management and user access controls over an application used by the issuer to determine the estimate. The firm did not test or in the alternative test any 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 certain controls over change management. (AS 1105.10)

The issuer used various models methodologies and assumptions to determine the estimate. The following deficiencies were identified: · The firm selected for testing change management and user access controls over an application used by the issuer to determine the estimate. In testing controls over user access the firm did not perform sufficient procedures to test the access controls because it limited its testing to users with certain access privileges. (AS 2201.42 and .44)

The issuer used various models methodologies and assumptions to determine the estimate. The following deficiencies were identified: · The firm selected for testing certain automated controls over the calculation and classification of data within the application used by the issuer to determine the estimate. The firm's approach to testing a single instance of each of these controls was dependent on effective information technology general controls. Due to the deficiencies in the firm's testing of the change management and user access controls discussed above the firm's testing of these automated controls was not sufficient. (AS 2201.46)

The issuer used various models methodologies and assumptions to determine the estimate. The following deficiencies were identified: · The firm identified deficiencies in the design of controls over certain assumptions used in the determination of the estimate. The firm identified and tested controls that it believed would mitigate these deficiencies. The firm did not identify that the compensating controls tested did not address whether changes to these assumptions were authorized. (AS 2201.68)

The firm selected for testing controls that consisted of the reconciliation of data from the issuer's revenue input system to its billing systems. The firm did not identify and test any controls over the accuracy of the data used in the operation of these controls. (AS 2201.39)

The firm selected for testing controls that consisted of (1) the approval of new customers and creation of customer accounts in the billing systems and (2) the review and approval of new contracts and sales orders. The firm did not test or in the alternative test any controls over the completeness of the reports that the firm used in its testing of these controls. (AS 1105.10)

The issuer reported revenue from multiple sources. The firm did not evaluate whether persuasive evidence of an arrangement existed and delivery of services had occurred as of the date in which certain revenue transactions selected for testing had been recognized. Further the firm did not perform any substantive procedures to test certain other revenue transactions. (AS 2301.08)

The firm selected for testing a control that consisted of management's review and approval of inventory adjustments. The firm did not evaluate the specific review procedures that the control owners performed to evaluate the accuracy of the inventory adjustments. (AS 2201.42 and .44)

The firm selected for testing a control that consisted of management's quarterly review and approval of the inventory reserve analysis. The firm did not evaluate the specific review procedures the control owners performed to evaluate the (1) reasonableness of certain assumptions used to determine the inventory reserve and (2) accuracy and completeness of a system-generated report used in the operation of the control. (AS 2201.42 and .44)

The firm's approach for substantively testing the inventory reserve was to review and test management's process. The firm did not sufficiently evaluate the reasonableness of the inventory reserve because the firm did not perform procedures to test the reasonableness of certain assumptions used by the issuer to determine the inventory reserve. (AS 2501.09 .10 and .11)

The firm's approach for substantively testing the inventory reserve was to review and test management's process. The firm did not test or sufficiently test controls over the accuracy and completeness of certain information the firm used in its substantive testing of the inventory reserve. (AS 1105.10; AS 2501.11)

The issuer accrues a provision for customer rebates. The firm selected for testing a control that consisted of management's review of the rebate accrual and an investigation of certain variances over established thresholds. The firm did not evaluate whether the thresholds that the control owner used were sufficiently precise to detect misstatements that could be material. (AS 2201.42 and .44)

The sample size the firm used in certain of its substantive procedures to test the rebate accrual 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)

The firm selected for testing a control that consisted of management's review of asset summary models including the underlying inputs and assumptions used to value certain long-lived 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. Further the firm did not test any controls over the accuracy and/or completeness of certain information used in the operation of this control. (AS 2201.42 and .44)

The firm selected for testing a control that consisted of management's review of financial information and related note disclosures. The firm did not identify that this control was not designed to address whether the issuer's short-term deposits were appropriately classified as cash equivalents. (AS 2201.42)

The firm did not perform procedures beyond inquiry of management to evaluate whether certain of the issuer's short-term deposits were appropriately classified as cash equivalents. (AS 2301.08)

The firm selected for testing a control that consisted of the issuer's review of the estimated value of certain financial assets categorized as level 3 securities. 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 and .44)

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

The firm selected for testing certain controls over revenue that consisted of (1) the reconciliation of billing data from a system-generated report from the issuer's general ledger system to the issuer's billing system and (2) management's review of certain unresolved reconciling items from the reconciliation of data from another system to the issuer's billing system. The firm did not identify and test any controls over the accuracy and completeness of the data used in the operation of these controls. (AS 2201.39)

The firm did not perform procedures to substantively test certain accounts receivable beyond examining the related customer invoice prepared by the issuer. (AS 2301.08)

To reduce the extent of its substantive procedures for certain revenue the firm tested and placed reliance on controls. The following deficiencies were identified: · The firm selected for testing various automated controls over this revenue that consisted of the configuration of the information technology (IT) system to automatically perform certain functions based on pre-established parameters and the firm used a “test of one” approach to test these controls. The firm's testing of these automated controls using a sample of only one instance of each processing alternative was not sufficient because the firm did not evaluate the system functionality of these controls beyond inquiry of the issuer's personnel regarding their processing alternatives or perform other procedures that would have provided sufficient appropriate audit evidence that these controls were designed and operating effectively. (AS 2301.18)

To reduce the extent of its substantive procedures for certain revenue the firm tested and placed reliance on controls. The following deficiencies were identified: · The firm selected for testing an IT dependent manual control over this revenue that consisted of management's review of the reconciliation of certain revenue transactions between two systems. The firm did not identify and test any controls over the accuracy and completeness of the system-generated information used in the operation of this control. (AS 2301.16)

To reduce the extent of its substantive procedures for certain revenue the firm tested and placed reliance on controls. 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 described above. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A)

The firm used reports prepared by a third party to substantively test certain other revenue but did not perform any procedures to evaluate the relevance and reliability of these reports. (AS 1105.04 and .06)

The firm identified a characteristic of potentially fraudulent entries or adjustments for testing but did not determine whether any journal entries met the characteristic. Instead the firm limited its testing of journal entries for this specific characteristic to haphazardly selected journal entries. (AS 2401.61)