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The issuer engaged external specialists to assist in determining the fair value of a significant account at inception and at year-end. The following deficiency was identified: • The firm did not perform procedures to test the inception date fair value of the significant account beyond obtaining and reading the company's specialist's report. Further the firm did not perform 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 engaged external specialists to assist in determining the fair value of a significant account at inception and at year-end. The following deficiency was identified: • The firm did not perform any procedures to evaluate the reasonableness of a certain significant assumption developed and used by the company's specialist to estimate the year-end fair value of the significant account. (AS 1105.A8b)

The issuer engaged external specialists to assist in determining the fair value of a significant account at inception and at year-end. The following deficiency was identified: • The firm did not perform sufficient procedures to evaluate whether the methodology used by the company's specialist to develop the year-end fair value of the significant account was appropriate under the circumstances because the firm did not evaluate whether the data and significant assumptions were appropriately applied under the applicable financial reporting framework. (AS 1105.A8c)

The firm tested certain controls over revenue at an interim date. The firm did not perform any procedures to update the results of that testing from the interim date to year end. (AS 2201.55)

The firm identified control deficiencies at certain of the issuer's components. The firm did not evaluate the severity of each identified control deficiency to determine whether the deficiency individually or in combination represented a material weakness. (AS 2201.62)

The sample sizes the firm used in certain of its substantive procedures to test 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 the deficiency in the firm's control testing discussed above. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A)

The firm performed certain substantive procedures to test revenue at an interim date. The firm did not perform any procedures to extend its audit conclusions from the interim date to year end. (AS 2301.45)

The firm did not determine the likely sources of potential misstatements associated with certain inventory to identify and test controls that addressed the risks of misstatement for the relevant assertions for this inventory. (AS 2201.30 and .39)

The issuer engaged an external specialist to estimate the quantity of certain inventory. The firm did not obtain an understanding of the methods and assumptions used by the external specialist to develop the estimate. (AS 1210.12)

The firm did not perform any procedures to test the existence of certain inventory. (AS 2510.09)

The firm identified a risk related to the manual consolidation process. The firm did not identify and test any controls over the issuer's financial statement consolidation process including controls over journal entries and other adjustments. (AS 2201.39)

In addition the firm did not perform any procedures to identify and select journal entries and other adjustments for testing. (AS 2401.58)

The firm used the work of the issuer's internal audit for certain testing of controls over the financial reporting and close process at certain components of the issuer. The firm did not assess the competence and objectivity of internal audit to support the extent to which the firm used its work. (AS 2201.19; AS 2605.09 and .10)

To test certain revenue the firm selected transactions from certain months during the year. The firm did not perform procedures beyond performing year-end cut-off procedures to test the population of sales transactions from the remaining months. (AS 1105.27; AS 2301.08 and .13)

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

To test accounts receivable at one of the issuer's components the firm performed confirmation procedures for a sample of balances at an interim date. The firm obtained a rollforward of accounts receivable from the interim date to year end and selected transactions that exceeded a monetary threshold to test. The firm did not perform procedures to test the remaining population of transactions. (AS 1105.27; AS 2301.08)

To test accounts receivable at one of the issuer's components the firm performed confirmation procedures for a sample of balances at an interim date. The firm obtained a rollforward of accounts receivable from the interim date to year end and selected transactions that exceeded a monetary threshold to test. To test the related allowance for doubtful accounts the firm developed an independent expectation of the estimate. The firm did not perform procedures to test or in the alternative test any controls over the accuracy and completeness of certain data it used to develop its independent expectation. (AS 1105.10)

To test accounts receivable at a second component and certain accounts receivable at a third component the firm selected balances for testing that exceeded a monetary threshold. The firm did not perform procedures to test the remaining population of accounts receivable. (AS 1105.27; AS 2301.08)

To test certain other accounts receivable at the third component the firm selected balances for testing at an interim date that exceeded a monetary threshold. The firm did not perform procedures to test the remaining population of accounts receivable. Further the firm did not perform procedures to extend its conclusion from the interim date to year end. (AS 1105.27; AS 2301.08 and .45)

The firm did not perform procedures to test or test any controls over the accuracy of certain data that it used to test the allowance for doubtful accounts at the second and third components. (AS 1105.10)

The issuer engaged a specialist to determine the valuation of certain inventory. The firm did not perform substantive procedures to test the reserve for this inventory 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 firm selected a sample of transactions to test certain revenue. For certain of the sampled transactions the firm did not perform procedures to evaluate whether (1) the issuer met its performance obligations before revenue was recognized and (2) the transaction prices used to recognize revenue were appropriate. (AS 2301.08 and .13)

The firm did not perform procedures to evaluate whether the issuer met its performance obligations before certain revenue from related parties was recognized. (AS 2410.17)

The issuer held inventory at multiple locations. Inventory counts were performed subsequent to year end for each location. The firm obtained an issuer-prepared inventory roll-back analysis to perform tests of intervening transactions. The following deficiency was identified: · To test the completeness of intervening transactions related to inventory purchases for certain inventory the firm selected inventory purchases from bank statements and certain general ledger accounts that exceeded certain monetary thresholds. The firm did not perform any procedures to address the risk related to the completeness of inventory purchases below those thresholds. (AS 1105.27; AS 2510.12)

The issuer held inventory at multiple locations. Inventory counts were performed subsequent to year end for each location. The firm obtained an issuer-prepared inventory roll-back analysis to perform tests of intervening transactions. The following deficiency was identified: · The firm did not perform any procedures to test the completeness of intervening transactions related to sales of that inventory. (AS 2501.12)

The issuer held inventory at multiple locations. Inventory counts were performed subsequent to year end for each location. The firm obtained an issuer-prepared inventory roll-back analysis to perform tests of intervening transactions. The following deficiency was identified: · For certain of the above inventory the firm did not perform any procedures to test the completeness of the intervening transactions unrelated to purchases or sales. (AS 2510.12)

The issuer used an information technology (IT) system to process certain revenue transactions. The firm's approach to testing revenue included reliance on certain IT change management controls over certain issuer-produced information used in the firm's substantive procedures. The firm did not perform procedures to test the completeness of the information that the firm used to test these IT change management controls. (AS 1105.10)

The issuer used an information technology (IT) system to process certain revenue transactions. The firm's approach to testing revenue included reliance on certain IT change management controls over certain issuer-produced information used in the firm's substantive procedures. The issuer recognized several types of revenue. To test one type of revenue the firm performed a substantive analytical procedure using sales data produced by the issuer's system. The firm did not perform procedures to test or test any controls over the accuracy and completeness of that data. (AS 2305.16)

The issuer used an information technology (IT) system to process certain revenue transactions. The firm's approach to testing revenue included reliance on certain IT change management controls over certain issuer-produced information used in the firm's substantive procedures. The firm selected a sample of transactions to test another type of revenue. The firm did not perform procedures to test or test any controls over the accuracy and completeness of certain issuer-prepared sales data that was used in testing the selected transactions. (AS 1105.10)

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

The issuer issued shares as part of a stock offering that included contingent rights. The firm did not evaluate whether the contingent rights were appropriately accounted for in conformity with FASB ASC Topic 815 Derivatives and Hedging. (AS 2301.08 and .11)

The firm did not perform sufficient procedures to obtain the necessary understanding of the flow of transactions within the revenue and accounts receivable transaction cycles including the effect of the issuer's information technology (“IT”) systems to identify the likely sources of potential misstatements. (AS 2201.34 and .36)

The firm selected for testing a control over the timing of revenue recognition. The firm however did not directly test the control because its procedures which consisted of determining that revenue was not recorded before goods were shipped for a sample of transactions were substantive in nature. (AS 2201.B9)

In addition the firm selected for testing a control that consisted of management's review of revenue including deferred revenue and the related journal entries. The firm did not evaluate the review procedures that the control owner performed including the criteria that the control owner used to identify items for follow up and whether those items were appropriately resolved. (AS 2201.42 and .44)

The firm selected for testing controls that consisted of management's review of income tax provisions and tax returns. The firm did not evaluate the review procedures that the control owners performed including the criteria that the control owners used to identify items for follow up and whether those items were appropriately resolved. (AS 2201.42 and .44)

In addition the firm did not identify and test any controls over the accuracy and completeness of the information used in the performance of these controls. (AS 2201.39)

The issuer recorded revenue when a user action in an electronic environment occurred and the revenue recognition criteria had been met. The issuer used an IT application to track user actions define and capture valid billable user actions and generate user activity reports. The firm tested IT general controls (“ITGCs”) and identified control deficiencies related to this IT application and the general ledger. The firm concluded either that the deficiencies were mitigated by other controls or that the deficiencies did not directly affect the firm's reliance on the issuer's controls over the accuracy and completeness of the data derived from the IT application. To test the accuracy and completeness of the reports the firm used in its substantive testing of revenue the firm (1) relied on its testing of ITGCs and application controls over revenue and (2) confirmed user activity with customers. The firm's reliance on these ITGCs and application controls was not supported because the firm did not sufficiently test the application controls used by the issuer to (1) track user actions (2) capture billable user actions and (3) generate the user activity reports used to calculate revenue because the firm did not consider the criteria necessary for valid user actions to occur how user actions were counted and accumulated and whether revenue recognition requirements were met. The firm also did not test compensating controls that mitigated the identified ITGC deficiencies and did not perform an evaluation to support its conclusion that those deficiencies did not affect its reliance on controls in the IT application. (AS 1105.10)

The issuer recorded revenue when a user action in an electronic environment occurred and the revenue recognition criteria had been met. The issuer used an IT application to track user actions define and capture valid billable user actions and generate user activity reports. The firm tested IT general controls (“ITGCs”) and identified control deficiencies related to this IT application and the general ledger. The firm concluded either that the deficiencies were mitigated by other controls or that the deficiencies did not directly affect the firm's reliance on the issuer's controls over the accuracy and completeness of the data derived from the IT application. To test the accuracy and completeness of the reports the firm used in its substantive testing of revenue the firm (1) relied on its testing of ITGCs and application controls over revenue and (2) confirmed user activity with customers. In addition the firm's confirmation procedures were not sufficient because the firm did not consider whether the issuer's customers would have the information necessary to confirm the user activity. (AS 2310.26)

The firm selected for testing multiple controls over user access to various applications. The firm did not evaluate the procedures that the control owners performed including the criteria that the control owners used to create edit and maintain the security roles within these applications. (AS 2201.42 and .44)

The firm selected for testing a number of automated application controls related to processing revenue transactions and performing database reconciliations. For certain of these controls the firm did not sufficiently test the design effectiveness of the controls because it did not determine whether items that met the issuer's established criteria would be properly investigated and resolved. (AS 2201.42)

For the other controls the firm did not perform any procedures to test the design effectiveness of the controls. (AS 2201.42)

The firm selected for testing controls that consisted of the issuer's review of revenue transactions and accounts receivable and the related reserve. The firm did not evaluate the review procedures that the control owners performed including the criteria that the control owners used to identify items for follow up and whether those items were appropriately resolved. (AS 2201.42 and .44)

The firm identified a control deficiency for a control related to the approval of new customers. The firm did not sufficiently evaluate the severity of the control deficiency because it did not identify that the compensating controls it selected for testing did not address the risk of material misstatement related to customers who were not approved. (AS 2201.68)

During the year the issuer acquired multiple businesses and used an external specialist to determine the fair values of the assets acquired and the liabilities assumed. The firm selected for testing a control that consisted of the issuer's review of the external specialist's valuation report. The firm did not evaluate the review procedures that the control owner performed including the criteria that the control owner used to identify items for follow up and whether those items were appropriately resolved. (AS 2201.42 and .44)

The issuer used two service organizations to initiate and process investment transactions. The firm did not identify and test any of the complementary user controls over the existence of investments. (AS 2201.B22)

In addition the firm did not identify and test any controls over the valuation of investments. (AS 2201.39)

The firm did not perform any procedures to evaluate (1) the terms and conditions of an arrangement under which the issuer recorded revenue and which involved other participants and a counterparty including the method used by the counterparty to allocate consideration to the issuer and other participants and (2) whether the revenue the issuer recognized under this arrangement was in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2810.30)

The firm selected for testing controls that consisted of the issuer's reviews of the allowance for doubtful accounts. The firm did not identify and test any controls over the accuracy and completeness of certain data used in the performance of these controls. (AS 2201.39)

The firm selected for testing controls that consisted of the issuer's review of income tax accounts. 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 firm did not identify and test any controls over information that the issuer manually entered into the revenue systems and used to record service revenue and deferred revenue. (AS 2201.39)