Explorer

The firm did not perform any substantive procedures over the amount of certain liabilities assumed. (AS 2301.08)

The firm did not identify and evaluate a departure from GAAP related to the incorrect calculation of stock-based compensation expense. (AS 2810.30 and .31)

The firm's internal inspection program had inspected this audit and reviewed this area but did not identify the deficiencies below. During the year the issuer identified indicators of impairment and performed a quantitative assessment of impairment. The firm did not perform procedures to evaluate the issuer's determination of the asset group used in its quantitative assessment. (AS 2301.08)

The firm's internal inspection program had inspected this audit and reviewed this area but did not identify the deficiencies below. During the year the issuer identified indicators of impairment and performed a quantitative assessment of impairment. The firm did not perform procedures beyond inquiry observing the issuer's implementation of certain assumptions and performing a sensitivity analysis to evaluate the reasonableness of the significant assumptions the issuer used in its quantitative assessment. (AS 2501.16)

The firm's procedures for identifying litigation claims and assessments and determining whether the financial accounting and reporting of such matters was complete and accurate consisted solely of obtaining letters of audit inquiry from the client's lawyers without evaluating such responses and performing other necessary procedures. (AS 2505.05)

The following deficiency was identified with respect to the derivative liabilities recorded for the conversion features embedded in the convertible debt: · The firm did not perform any procedures to evaluate the accounting treatment of the embedded conversion features as derivative liabilities. (AS 2301.08 and .11)

The following deficiency was identified with respect to the derivative liabilities recorded for the conversion features embedded in the convertible debt: · The firm did not perform substantive procedures to test the fair value of the derivative liabilities beyond obtaining and reading a company-provided memo. (AS 2501.07)

The following deficiency was identified with respect to the derivative liabilities recorded for the conversion features embedded in the convertible debt: · The firm did not perform any procedures to test the disclosures related to the derivative liabilities. (AS 2301.08 and .11)

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 sent a positive confirmation request for a liability at year end. The respondent did not respond to the aspect of the confirmation request related to the amount of liability outstanding and informed the firm that the loans were sold to another entity. The firm did not perform any alternative procedures including confirmation with the purchaser of the loans. (AS 2310.31)

he firm did not perform procedures to test the identified transactions with related parties including whether the transactions were properly accounted for and disclosed in the issuer's financial statements beyond inquiry and obtaining information provided by the issuer about the transactions. (AS 2410.12 and .17)

The firm did not evaluate whether the issuer had properly identified all of 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 and .17)

The firm did not identify and evaluate a departure from GAAP related to the issuer's omission of disclosures required by FASB ASC Topic 850 Related Party Disclosures. (AS 2410.17; 2810.30 and .31)

The issuer entered into certain significant transactions during the year. The firm did not evaluate the business purpose (or lack thereof) of these transactions that appeared unusual due to the timing size or nature including whether they may have been entered into to engage in fraudulent financial reporting or conceal misappropriation of assets given certain facts regarding these transactions. (AS 2401.67)

In addition the firm did not perform procedures to test the transactions including the appropriateness of the accounting treatment the valuation and the related disclosures. (AS 2301.08)

The firm did not perform any substantive procedures to test certain revenue. (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 procedures to test a subsequent event transaction beyond inquiry and obtaining a board resolution regarding the planned transaction. (AS 2301.08)

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

To test another liability the firm sent a positive confirmation request to an external party and received the response via email. The firm did not consider performing procedures to address the risks associated with electronic responses such as verifying the source and contents of the confirmation responses. (AS 2310.29)

To test another liability the firm sent a positive confirmation request to an external party and received the response via email. The firm obtained bank statements showing certain deposits related to this liability. The firm did not perform procedures to verify the source of those deposits. (AS 2301.08)

The firm did not perform procedures to test certain related party transactions and balances including whether they were properly disclosed in the financial statements beyond inquiry with management. (AS 2410.12 and .17)

The issuer issued stock in exchange for services provided. The firm did not perform any procedures to test whether share-based expenses were recognized in the appropriate period and in accordance with the terms of the relevant agreements including whether the issuance of shares of common stock was approved by the issuer's Board of Directors. (AS 2301.08)

The firm did not identify and evaluate a departure from GAAP related to the issuer's omission of certain disclosures related to certain share-based payment transactions required by FASB ASC Topic 718 Compensation—Stock Compensation. (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)

For certain other revenue the following deficiency was identified: · The firm did not perform procedures to evaluate whether the issuer's recognition of this revenue was in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2301.08)

For certain other revenue the following deficiency was identified: · The sample size the firm used in its substantive procedures to test this revenue was too small to provide sufficient appropriate audit evidence because in determining its sample the firm did not take into account the relevant factors in determining its sample size including tolerable misstatement the allowable risk of incorrect acceptance and the characteristics of the population. (AS 2315.16 .19 .23 and .23A)

For certain other revenue the following deficiency was identified: · The firm did not identify and evaluate a GAAP departure related to the issuer's omission of disclosures related to significant payment terms for its customer contracts as required by FASB ASC Topic 606. (AS 2810.30 and .31)

The issuer reported convertible notes payable with conversion features that were recorded as derivative liabilities. The following deficiency was identified with respect to convertible notes payable: · The firm did not perform any procedures to test certain convertible notes payable. (AS 2301.08 and .11)

The issuer reported convertible notes payable with conversion features that were recorded as derivative liabilities. The following deficiency was identified with respect to convertible notes payable: · The firm sent a positive confirmation request to the issuer's lender for a convertible note payable. The confirmation was returned with an exception and the firm did not consider the nature of the exception and whether additional evidence was needed. (AS 2310.33)

The issuer reported convertible notes payable with conversion features that were recorded as derivative liabilities. The following deficiency was identified with respect to convertible notes payable: · The firm did not perform any procedures to test the unamortized debt discount related to the convertible notes payable. (AS 2301.08 and .11)

The issuer reported convertible notes payable with conversion features that were recorded as derivative liabilities. The following deficiency was identified with respect to convertible notes payable: · The firm did not perform any procedures to test the disclosures related to the convertible notes payable. (AS 2301.08 and .11)

The issuer's systems calculate inventory cost using various inputs. The firm did not perform any substantive procedures to test the inventory cost calculations. (AS 2301.08)

The issuer recognized revenue from multiple revenue sources. The following deficiencies were identified with respect to the firm's ICFR audit: • The firm selected for testing a control that consisted of the issuer's review of a sample of customer invoices to verify the pricing information reflected in the selected invoices. The firm did not identify and test any controls over the completeness of the population the issuer used to select invoices for review 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 additional material weaknesses existed that had not been previously identified. The issuer subsequently reflected these additional material weaknesses in a revision to its report on ICFR and the firm revised and reissued its report on ICFR to include these additional material weaknesses.

The firm's approach for substantively testing certain revenue included performing a software-assisted analysis to test the relationships among revenue accounts receivable deferred revenue and cash receipts. The reliability of the audit evidence obtained from this analysis was dependent upon the firm's testing of cash receipts data underlying the analysis. The firm also performed tests of details and substantive analytical procedures over the revenue using data from system-generated reports provided by the issuer. The following deficiency was identified: • With respect to the tests of details and substantive analytical procedures the firm did not perform any procedures to test or test any controls over the accuracy and completeness of the data or system-generated reports it used to perform the procedures. (AS 1105.10; AS 2305.16)

The firm did not perform procedures to evaluate whether certain revenue was recognized in conformity with IFRS. (AS 2301.08)

The firm's approach for substantively testing certain other revenue consisted primarily of performing a software-assisted analysis to test the relationships among revenue accounts receivable and cash receipts. The reliability of the audit evidence obtained from this analysis was dependent upon the appropriateness of the data underlying the analysis. The firm included data from certain non-revenue related accounts including expense liability and non-cash general ledger accounts in the analysis. The firm did not perform sufficient procedures to evaluate whether the data used in the analysis was appropriate because it did not evaluate the implications of including certain data from these non-revenue related accounts in the analysis on the sufficiency and appropriateness of the underlying data. (AS 1105.10)

The firm identified journal entries that met certain risk criteria but did not examine the underlying support for the journal entries. (AS 2401.61)

The issuer recognized revenue from multiple revenue sources. The following deficiencies were identified with respect to the firm's ICFR audit: • The firm did not identify and test any controls over certain revenue. (AS 2201.39) In connection with our review the issuer reevaluated its controls over revenue including IT controls and concluded that additional material weaknesses existed that had not been previously identified. The issuer subsequently reflected these additional material weaknesses in a revision to its report on ICFR and the firm revised and reissued its report on ICFR to include these additional material weaknesses.

The issuer recognized revenue from multiple revenue sources. The following deficiencies were identified with respect to the firm's ICFR audit: • The firm selected for testing two other controls that consisted of the issuer's review of a sample of customer invoices to verify the pricing and other information reflected in the selected invoices. The firm did not identify and test any controls over the completeness of the population the issuer used to select invoices for review in the operation of these controls. (AS 2201.39) In connection with our review the issuer reevaluated its controls over revenue including IT controls and concluded that additional material weaknesses existed that had not been previously identified. The issuer subsequently reflected these additional material weaknesses in a revision to its report on ICFR and the firm revised and reissued its report on ICFR to include these additional material weaknesses.

The issuer recognized revenue from multiple revenue sources. The following deficiencies were identified with respect to the firm's ICFR audit: • The firm selected for testing various controls that consisted of the issuer's review and/or reconciliation of certain system-generated data and reports used to recognize revenue and the issuer's follow-up on missing or duplicate data files. The firm did not identify and test any controls over the accuracy and completeness of the system-generated information used in the operation of these controls. (AS 2201.39) In connection with our review the issuer reevaluated its controls over revenue including IT controls and concluded that additional material weaknesses existed that had not been previously identified. The issuer subsequently reflected these additional material weaknesses in a revision to its report on ICFR and the firm revised and reissued its report on ICFR to include these additional material weaknesses.

The issuer recognized revenue from multiple revenue sources. The following deficiencies were identified with respect to the firm's ICFR audit: • The firm selected for testing various automated controls that consisted of the configuration of the information technology (IT) system to automatically perform certain functions based on pre-established parameters. The firm's testing of these automated controls was not sufficient because the firm did not evaluate the program logic of these controls beyond obtaining certain documentation from the vendor or perform other procedures that would have provided sufficient appropriate audit evidence that these controls were designed and operating effectively. (AS 2201.42 and .44) In connection with our review the issuer reevaluated its controls over revenue including IT controls and concluded that additional material weaknesses existed that had not been previously identified. The issuer subsequently reflected these additional material weaknesses in a revision to its report on ICFR and the firm revised and reissued its report on ICFR to include these additional material weaknesses.

The issuer recognized revenue from multiple revenue sources. The following deficiencies were identified with respect to the firm's ICFR audit: • The firm did not identify and test controls that addressed certain risks of material misstatement related to certain revenue. (AS 2201.39) In connection with our review the issuer reevaluated its controls over revenue including IT controls and concluded that additional material weaknesses existed that had not been previously identified. The issuer subsequently reflected these additional material weaknesses in a revision to its report on ICFR and the firm revised and reissued its report on ICFR to include these additional material weaknesses.

The issuer recognized revenue from multiple revenue sources. The following deficiencies were identified with respect to the firm's ICFR audit: • The firm did not identify and test any controls over the issuer's evaluation of certain customer contract terms to ensure that the corresponding revenue was recognized in conformity with IFRS. (AS 2201.39) In connection with our review the issuer reevaluated its controls over revenue including IT controls and concluded that additional material weaknesses existed that had not been previously identified. The issuer subsequently reflected these additional material weaknesses in a revision to its report on ICFR and the firm revised and reissued its report on ICFR to include these additional material weaknesses.

The issuer recognized revenue from multiple revenue sources. The following deficiencies were identified with respect to the firm's ICFR audit: • The firm selected for testing various other controls but did not perform any procedures to test or test any controls over the completeness of the populations from which it made its selections for testing. (AS 1105.10) In connection with our review the issuer reevaluated its controls over revenue including IT controls and concluded that additional material weaknesses existed that had not been previously identified. The issuer subsequently reflected these additional material weaknesses in a revision to its report on ICFR and the firm revised and reissued its report on ICFR to include these additional material weaknesses.

The firm's approach for substantively testing certain revenue included performing a software-assisted analysis to test the relationships among revenue accounts receivable deferred revenue and cash receipts. The reliability of the audit evidence obtained from this analysis was dependent upon the firm's testing of cash receipts data underlying the analysis. The firm also performed tests of details and substantive analytical procedures over the revenue using data from system-generated reports provided by the issuer. The following deficiency was identified: • With respect to the software-assisted analysis the firm did not perform procedures to test the cash receipts data underlying the analysis. (AS 1105.10)

The firm did not perform procedures to test whether all criteria were met to recognize revenue. (AS 2301.08)

The sample size the firm used in its substantive procedure to test revenue was too small to achieve the planned objective for the test because it used the methodology for determining a sample size for a test of controls and did not consider factors relevant to determining the sample size for its substantive testing. (AS 2315.16 .23 and .23A)

The firm did not evaluate the reasonableness of the allowance for doubtful accounts beyond inquiring of management and obtaining evidence of certain cash collections. (AS 2501.07)

The firm's substantive procedures to test inventory included observing inventory after year end and obtaining a roll-back schedule from the date of the inventory observation to the balance sheet date. The firm did not test certain types of transactions in this schedule. (AS 2510.12)