Explorer

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

The firm did not perform any procedures to evaluate the terms and conditions of a customer arrangement to determine whether the issuer appropriately recognized revenue under the arrangement in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2810.30)

The firm selected revenue transactions for testing but did not perform procedures to test whether all of the related performance obligations were satisfied when the issuer recognized revenue. (AS 2301.08)

To test accounts receivable the firm sent confirmation requests to a sample of customers. For confirmation requests that were not returned the firm performed alternative procedures by testing subsequent cash receipts. The firm did not (1) perform any alternative procedures to test the accounts receivable balances with no subsequent cash receipts and (2) evaluate the combined evidence provided by the confirmation responses and the alternative procedures to determine whether these procedures provided sufficient appropriate evidence about the existence of accounts receivable. (AS 2310.31 and .33)

The firm did not perform any procedures to evaluate whether the issuer tested non-amortizable intangible assets for impairment. (AS 2301.08)

The firm selected a sample of revenue transactions for testing by computing the number of invoices issued during the year by subtracting the first invoice number from the final invoice number for the year from the sales sub-ledger and dividing by the required sample size. The firm then selected invoices based on a defined sampling interval. The firm did not (1) determine whether the invoices selected for testing were recorded within the sales sub-ledger and (2) obtain and test the reconciliation of the sales sub-ledger to the issuer's general ledger. (AS 1105.10)

For certain revenue transactions selected for testing the firm did not perform any procedures to test whether delivery had occurred when the issuer recognized revenue. (AS 2301.08)

The firm's approach to substantively testing the issuer's reserve for excess and obsolete inventory was to review and test management's process. The firm did not perform any substantive procedures to test or test controls over the accuracy and completeness of certain data used by the issuer to estimate the inventory reserves. (AS 1105.10; AS 2501.11)

To test revenue the firm selected revenue transactions that exceeded a monetary threshold and judgmentally selected a sample of revenue transactions from the remaining population. In determining the sample size for the remaining population the firm did not take into account the relevant factors including tolerable misstatement for the population the allowable risk of incorrect acceptance and the characteristics of the population. As a result the sample size the firm used in its test of details was too small to provide sufficient appropriate audit evidence. (AS 2315.16 .23 and .23A)

The firm's substantive procedures to test revenue included testing a selection of revenue transactions and performing year-end cut-off procedures. The following deficiency was identified: · The firm did not perform sufficient procedures to evaluate whether the issuer recognized revenue in accordance with FASB ASC 606 Revenue from Contracts with Customers (FASB ASC 606) because it did not perform procedures to evaluate whether (1) customers agreed to the price and quantity for certain revenue transactions selected for testing and (2) a customer contract met the five criteria described in FASB ASC 606 to qualify as such. (AS 2301.08 and .13)

The firm's substantive procedures to test revenue included testing a selection of revenue transactions and performing year-end cut-off procedures. The following deficiency was identified: · The firm did not perform sufficient procedures to test revenue cut-off because the firm did not consider contrary evidence related to certain revenue transactions selected for testing which indicated that the revenue may not have been recognized in the correct period. (AS 2301.08 and .13; AS 2810.03)

The firm's substantive procedures to test revenue included testing a selection of revenue transactions and performing year-end cut-off procedures. The following deficiency was identified: · The firm did not perform any substantive procedures to test product returns. (AS 2301.08 and .13)

The firm did not perform procedures to test certain intangible assets for impairment beyond comparing the book value of the assets to the corresponding revenue stream for the current year. (AS 2501.07)

The firm did not perform procedures to test or test any controls over the accuracy and completeness of the revenue streams used in its impairment testing of these intangible assets. (AS 1105.10)

The firm identified uncorrected misstatements in the current year audit. The firm did not accumulate certain uncorrected misstatements related to revenue and cost of goods sold including the firm's best estimate of the total misstatement in the related accounts and disclosures tested and evaluate whether they were material individually or in combination with other misstatements. (AS 2810.10 .12 and .17)

The firm did not perform any substantive procedures to test the allowance for doubtful accounts. (AS 2501.07)

The firm did not perform any procedures to test an adjustment recorded by the issuer during the financial reporting and close process. (AS 2301.08 and .11)

In its testing of revenue the firm did not obtain evidence that revenue recognition criteria had been met. (AS 2301.08)

The firm did not evaluate the appropriateness of the issuer's conclusion not to record a reserve for certain assets. (AS 2501.07; AS 2810.03)

To test revenue the firm selected a sample of cash receipts from a journal of cash receipts. The following deficiencies were identified: · The firm drew its sample from the population of cash receipts that were not necessarily representative of revenue recorded during the year. (AS 2315.17)

To test revenue the firm selected a sample of cash receipts from a journal of cash receipts. The following deficiencies were identified: · The firm did not perform any substantive procedures to test the completeness of the journal of cash receipts. (AS 1105.10)

To test revenue the firm selected a sample of cash receipts from a journal of cash receipts. The following deficiencies were identified: · The firm did not perform sufficient substantive procedures to test whether revenue was recognized in the appropriate period because it limited its testing to revenue transactions before the end of the year. (AS 2301.08 and .13)

To test revenue the firm selected a sample of cash receipts from a journal of cash receipts. The following deficiencies were identified: · The firm did not perform procedures to evaluate whether the issuer recognized revenue in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2301.08 and .13)

The firm did not perform any procedures to evaluate whether debt was appropriately accounted for in conformity with generally accepted accounting principles. (AS 2301.08)

To test the debt the firm sent positive confirmation requests to the noteholders. For certain positive confirmation requests for which it did not receive a response the firm did not perform alternative procedures that provided sufficient appropriate audit evidence that the debt was complete at year end. (AS 2310.31)

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 completed the review of a significant number of auditing procedures after the report release date. (AS 1105.04; AS 1201.05; AS 1215.15)

The firm did not perform procedures to evaluate whether the issuer recognized revenue in conformity with the relevant steps required under FASB ASC Topic 606. (AS 2301.08 and .13)

The firm did not perform sufficient substantive procedures to test whether revenue was recognized in the appropriate period because it limited its testing to revenue transactions before the end of the year. (AS 2301.08 and .13)

The issuer recognized revenue based on the relationship between actual costs incurred and total estimated contract costs which were accumulated within an issuer-prepared schedule (the 'Schedule'). The firm did not perform sufficient procedures to test or in the alternative test any controls over the accuracy and completeness of the actual costs incurred included in the Schedule because its procedures were limited to comparing the results of its testing of inventory and payroll to the Schedule. (AS 1105.10)

In addition the firm did not perform any substantive procedures to evaluate the reasonableness of total estimated contract costs included in the Schedule. (AS 2501.07)

During the year the issuer acquired two businesses. With respect to one of these business combinations the following deficiencies were identified: · The purchase price for the acquisition included contingent consideration based on forecasted revenue. The issuer estimated the fair value of the initial contingent consideration using certain assumptions. The firm did not perform any procedures to evaluate the fair value of the contingent consideration. (AS 2502.15)

Certain of these notes contained default clauses related to the issuer's obligation to reserve a sufficient number of shares from its authorized and unissued common stock. The firm did not evaluate whether these notes were in default at the time of issuance and therefore the derivative liability should have been recorded at the time of issuance. (AS 2301.08; AS 2810.03)

To evaluate the possible impairment of proved oil and gas reserves and make certain required disclosures the issuer engaged an external specialist to estimate the present value of future net cash flows from these reserves using the issuer's projected operating costs. The firm did not sufficiently test these projected operating costs because it limited its procedures to comparing the first year of projected operating costs to the prior-year actual operating costs. (AS 1210.12)

During the year the issuer acquired two businesses. With respect to one of these business combinations the following deficiencies were identified: · The issuer subsequently remeasured the contingent consideration and recorded the change as an expense. The firm did not sufficiently evaluate whether the change was a result of events that occurred subsequent to the acquisition date and was appropriately recorded as an expense in conformity with FASB ASC Subtopic 805-30 Business Combinations - Goodwill or Gain from Bargain Purchase Including Consideration Transferred because the firm did not identify that the forecasted revenue the issuer used for the remeasurement was consistent with the historical revenue at the acquisition date. (AS 2810.03 and .30)

During the year the issuer acquired two businesses. With respect to one of these business combinations the following deficiencies were identified: · The firm did not perform any procedures to test the fair value of an intangible asset. (AS 2502.15) In addition the firm did not evaluate whether the method used to determine the fair value of this intangible asset was in conformity with FASB ASC 805 Business Combinations. (AS 2810.30)

During the year the issuer acquired two businesses. With respect to one of these business combinations the following deficiencies were identified: · The firm did not perform any procedures to evaluate whether all identifiable assets acquired and liabilities assumed were identified and appropriately recorded. (AS 2301.08)

With respect to the other business combination the following deficiencies were identified: · The firm's approach for substantively testing the fair value of an acquired intangible asset was to review and test management's process. The firm did not perform procedures beyond inquiry of management to evaluate the reasonableness of certain assumptions used to determine the fair value of this asset. (AS 2502.26 and .28)

With respect to the other business combination the following deficiencies were identified: · The firm did not perform any substantive procedures to test the fair value of certain other assets acquired and liabilities assumed in this business combination. (AS 2502.15)

The firm selected for testing a sample of revenue transactions. In its evaluation of the issuer's revenue recognition the firm did not evaluate whether the identification of performance obligations and the allocation of the transaction price to the performance obligations were appropriate given the existence of contradictory evidence. (AS 2301.08; AS 2810.03)

The firm used data from one of the issuer's systems to test certain revenue but did not test or in the alternative identify and test controls over the accuracy and completeness of this data. (AS 1105.10)

The issuer reported certain convertible notes that included embedded conversion features that were effective after a certain period of time. The issuer recorded a derivative liability associated with these features after that period of time expired. The firm did not sufficiently evaluate whether the derivative liability should have been initially recorded on the issuance date of the convertible notes because it did not perform procedures to determine whether the feature met the definition of a derivative and whether the issuer had sufficient authorized and unissued shares to convert any of the notes at each note's issuance date and at year end. (AS 2301.08)

The firm did not perform any procedures to evaluate the reliability of the information it obtained from external sources that it used to test certain revenue. (AS 1105.04 and .06)

The firm selected a sample of revenue transactions for testing. The firm did not perform any substantive procedures to test estimates used to recognize revenue and related accounts for certain of these transactions. (AS 2501.07)

The firm identified fraud criteria for journal entries. The firm did not apply the criteria to the entire population of journal entries to identify all journal entries that met the criteria. Further the firm limited its testing of journal entries to a haphazard selection. (AS 2401.61)

The firm did not perform any procedures to evaluate the terms and conditions of an agreement for certain revenue. (AS 2301.08 and .13)

The firm did not perform any procedures to test the appropriateness of the amount of revenue recognized. (AS 2301.08 and .13)

The firm did not perform sufficient procedures to test the estimated useful lives assigned to the issuer's property and equipment because it limited its procedures to comparing the useful lives to information from an external source. Further the firm did not evaluate the relevance and reliability of the information. (AS 1105.04 and .06; AS 2501.07)

The firm did not perform procedures to evaluate the issuer's conclusion that there were no indicators of potential impairment even though the firm was aware that such conditions existed. (AS 2301.08; AS 2810.03)

The firm did not perform sufficient procedures to evaluate whether the issuer recognized an acquisition in accordance with FASB ASC Topic 805 Business Combinations because it did not evaluate whether the assets acquired and liabilities assumed met the definition of a business. (AS 2301.08 and .11)

The firm did not perform sufficient procedures to test the fair value of certain liabilities assumed because it did not perform any procedures to test or test any controls over the accuracy and completeness of a report used in its testing. (AS 1105.10)