Explorer

During the audit the firm did not identify and appropriately address that the issuer's accounting for certain redeemable shares as permanent equity was not in conformity with FASB ASC Topic 480. (AS 2810.30)

During the audit the firm did not identify and appropriately address that the issuer's accounting for warrants as equity was not in conformity with FASB ASC Topic 815. (AS 2810.30) Unrelated to our review the issuer reevaluated its accounting for these warrants 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 audit the firm did not identify and appropriately address that the issuer's accounting for certain redeemable shares as permanent equity was not in conformity with FASB ASC Topic 480. (AS 2810.30)

During the audit the firm did not identify and appropriately address that the issuer's accounting for warrants as equity was not in conformity with FASB ASC Topic 815. (AS 2810.30) Unrelated to our review the issuer reevaluated its accounting for these warrants 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 audit the firm did not identify and appropriately address that the issuer's accounting for certain redeemable shares as permanent equity was not in conformity with FASB ASC Topic 480. (AS 2810.30)

The firm selected for testing a control that consisted of a quarterly comparison of financial results including revenue to the results of the prior quarters. The firm did not identify and test any controls over the accuracy and completeness of information used in the operation of this control. (AS 2201.39)

The issuer recognized certain revenue based on electronic activity that was processed by a third-party service provider and the firm used certain reports produced by the third-party service provider in its substantive testing. The firm did not sufficiently test the accuracy and completeness of the data included in such reports because its procedures were limited to testing only a small number of revenue types and for those revenue types selected for testing it tested only one of multiple types of transactions. (AS 2301.08)

The firm relied on an outside source to provide reasonable assurance that the transactions processed by the third-party service provider were accurate. The firm however did not perform any procedures to determine whether it was appropriate to place such reliance on the outside source. (AS 1105.04)

During the audit the firm did not identify and appropriately address that the issuer's accounting for warrants as equity was not in conformity with FASB ASC Topic 815. (AS 2810.30) Unrelated to our review the issuer reevaluated its accounting for these warrants 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 audit the firm did not identify and appropriately address that the issuer's accounting for warrants as equity was not in conformity with FASB ASC Topic 815. (AS 2810.30)

During the audit the firm did not identify and appropriately address that the issuer's accounting for certain redeemable shares as permanent equity was not in conformity with FASB ASC Topic 480. (AS 2810.30)

The issuer used a service organization to process and record transactions related to payroll expense and the firm used certain reports produced by the service organization in its substantive testing. The firm did not test the completeness and accuracy of the data that the issuer submitted to the service organization. Although the firm obtained and read the service auditor's report it did not identify and test any necessary complementary user controls that were described in the service auditor's report. (AS 2301.08)

The firm did not perform any procedures to test the additions made to long-lived assets during the year. (AS 2301.08)

The issuer recorded at fair value intangible assets that it acquired as part of a current-year business combination. The firm's approach for testing the fair value of one of the acquired intangible assets was to develop an independent estimate of the fair value using forecasted revenue growth rates produced by the issuer. The firm did not evaluate the reasonableness of these revenue growth rates. (AS 2501.24)

The issuer recorded at fair value intangible assets that it acquired as part of a current-year business combination. The firm's approach for testing the fair value of one of the acquired intangible assets was to develop an independent estimate of the fair value using forecasted revenue growth rates produced by the issuer. The firm did not perform any procedures to test the fair value of the other acquired intangible assets. (AS 2501.07)

During the audit the firm did not identify and appropriately address that the issuer's accounting for certain warrants as equity was not in conformity with FASB ASC Topic 815. (AS 2810.30)

The firm selected for testing a control that consisted of a quarterly comparison of financial results including revenue to the results of the prior quarters. The firm did not evaluate the specific review procedures that the control owner performed to investigate identified variances and determine whether items identified for follow up had been appropriately resolved. (AS 2201.42 and .44)

During the audit the firm did not identify and appropriately address that the issuer's accounting for warrants as equity was not in conformity with FASB ASC Topic 815. (AS 2810.30) Unrelated to our review the issuer reevaluated its accounting for these warrants 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.

The issuer recognized a certain type of revenue based on the volume of product it delivered to its customers. The firm used volume data in its substantive testing of this revenue but did not perform any procedures to test or in the alternative identify and test any controls that addressed the accuracy and completeness of the volume data. (AS 1105.10)

During the audit the firm did not identify and evaluate the significance to the financial statements of a misstatement in certain required disclosures under FASB ASC Topic 820. (AS 2810.30 and .31)

The firm did not identify and test any controls over the accounting implications and disclosure requirements related to certain modifications made to existing contracts that resulted in a change in the time frame for a performance obligation to be satisfied under FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2201.39)

The firm did not identify and evaluate the significance to the financial statements of the issuer's omission of a disclosure of a change in the time frame for a performance obligation to be satisfied. Such disclosure is required under FASB ASC Topic 606. (AS 2810.30 and .31)

The issuer used information-technology (IT) systems to initiate process and record transactions related to certain revenue. The following deficiencies were identified: · The firm selected for testing an automated control but its testing of a sample of only one item was not sufficient because the firm did not test the configuration or programming of the automated control or perform other procedures that would have provided sufficient appropriate audit evidence that the automated control was designed and operating effectively. (AS 2201.42 and .44)

The issuer used information-technology (IT) systems to initiate process and record transactions related to certain revenue. The following deficiencies were identified: · The firm did not identify and test any controls over the accuracy and completeness of the shipment information that was entered into one of the IT systems and that the issuer used to record this revenue. (AS 2201.39)

The issuer incurred costs related to certain intangible assets. The firm selected for testing a control that consisted of the issuer's review of such costs. The firm did not evaluate the specific review procedures that the control owners performed to assess the reasonableness of certain inputs and assumptions used in the valuation of such assets. (AS 2201.42 and .44)

During the audit the firm did not identify and appropriately address that the issuer's accounting for warrants and forward purchase agreements as equity was not in conformity with FASB ASC Topic 815 Derivatives and Hedging. (AS 2810.30) Unrelated to our review the issuer reevaluated its accounting for these warrants and forward purchase agreements and concluded that material misstatements existed that had not been previously identified. The issuer subsequently corrected these misstatements in a restatement of its financial statements and the firm revised and reissued its report on the financial statements.

For certain revenue the firm did not identify and evaluate that the issuer's determination that it was acting as an agent was not in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2810.30)

During the year the issuer acquired multiple businesses and engaged a specialist to assist it in determining the fair values of certain acquired assets using various significant assumptions. The following deficiency was identified: · For one of these business combinations the firm did not sufficiently evaluate the relevance and reliability of the company's specialist's work because it did not identify and evaluate inconsistencies between the measurement of or significant assumptions used in the enterprise fair value estimated by the company's specialist compared to both (1) the fair value of the consideration transferred by the issuer and (2) certain significant assumptions developed by the company's specialist. (AS 1105.A9 and .A10)

During the year the issuer acquired multiple businesses and engaged a specialist to assist it in determining the fair values of certain acquired assets using various significant assumptions. The following deficiency was identified: · For one of these business combinations the fair value measurement of acquired customer relationships resulted in a negative balance and the issuer concluded that an associated intangible asset did not exist. The firm did not evaluate whether the negative fair value represented future contract losses and should have been recorded as an assumed liability in conformity with FASB ASC Topic 805 Business Combinations. (AS 2301.08)

The firm used an auditor-engaged specialist to assist it with testing the fair value of an acquired asset which was determined by the company's specialist. The auditor-engaged specialist's approach consisted of (1) testing the issuer's process and (2) developing an independent expectation of the fair value as a range. The following deficiency was identified · The firm did not identify that the auditor-engaged specialist did not sufficiently evaluate whether the valuation method used by the company's specialist was appropriate under the circumstances because it did not consider the highest and best use of the acquired asset. (AS 1105.A8c; AS 1210.09 and .12) In connection with our review the issuer reevaluated its accounting for this asset and determined that an error existed that had not been previously identified. The issuer corrected this error in a subsequent filing.

The firm used an auditor-engaged specialist to assist it with testing the fair value of an acquired asset which was determined by the company's specialist. The auditor-engaged specialist's approach consisted of (1) testing the issuer's process and (2) developing an independent expectation of the fair value as a range. The following deficiency was identified · When testing the issuer's process the firm did not identify that the auditor-engaged specialist did not perform any procedures to evaluate the reasonableness of a significant assumption developed by the company's specialist. (AS 1105.A8b; AS 1210.09 and .12) In connection with our review the issuer reevaluated its accounting for this asset and determined that an error existed that had not been previously identified. The issuer corrected this error in a subsequent filing.

The firm used an auditor-engaged specialist to assist it with testing the fair value of an acquired asset which was determined by the company's specialist. The auditor-engaged specialist's approach consisted of (1) testing the issuer's process and (2) developing an independent expectation of the fair value as a range. The following deficiency was identified · The firm did not evaluate whether the auditor-engaged specialist's independent expectation of the fair value as a range encompassed only reasonable outcomes and was supported by sufficient appropriate audit evidence. (AS 1210.09 and .12; AS 2501.25) In connection with our review the issuer reevaluated its accounting for this asset and determined that an error existed that had not been previously identified. The issuer corrected this error in a subsequent filing.

The firm used an auditor-engaged specialist to assist it with testing the fair value of an acquired asset which was determined by the company's specialist. The auditor-engaged specialist's approach consisted of (1) testing the issuer's process and (2) developing an independent expectation of the fair value as a range. The following deficiency was identified · The firm did not perform any procedures to evaluate the relevance and reliability of certain information used by the auditor-engaged specialist to develop its independent expectation. (AS 1105.04 and .06; AS 1210.09 and .12) In connection with our review the issuer reevaluated its accounting for this asset and determined that an error existed that had not been previously identified. The issuer corrected this error in a subsequent filing.

The firm used an auditor-engaged specialist to assist it with testing the fair value of an acquired asset which was determined by the company's specialist. The auditor-engaged specialist's approach consisted of (1) testing the issuer's process and (2) developing an independent expectation of the fair value as a range. The following deficiency was identified · The firm did not identify and evaluate that the issuer incorrectly recorded the fair value of the acquired asset determined by the company's specialist. (AS 2810.30) In connection with our review the issuer reevaluated its accounting for this asset and determined that an error existed that had not been previously identified. The issuer corrected this error in a subsequent filing.

The firm did not identify and evaluate that the method the issuer used to estimate the impairment of certain intangible assets was not in conformity with FASB ASC Topic 350. (AS 2810.30) Unrelated to our review the issuer reevaluated its accounting for these assets and concluded that misstatements existed that had not been previously identified. The issuer subsequently filed a Form 8-K indicating that its previously issued financial statements should not be relied on and corrected these misstatements in a subsequent filing.

The firm did not identify and evaluate that the issuer's omission of certain disclosures for assets measured at fair value on a nonrecurring basis was not in conformity with FASB ASC Topic 820 Fair Value Measurements. (AS 2810.30 and .31)

The firm did not perform sufficient procedures to evaluate the issuer's presentation of certain intangible assets as current assets because it did not evaluate the issuer's intent to consume all or a portion of these assets within one year from the balance sheet date. (AS 2301.08)

The firm did not identify and evaluate the issuer's omission of a required disclosure under FASB ASC Topic 606 related to how the issuer recognized this revenue. (AS 2810.30 and .31) Unrelated to our review the issuer reevaluated its accounting and disclosures for this revenue and concluded that material misstatements existed that had not been previously identified. The issuer subsequently filed a Form 8-K indicating that its previously issued financial statements should not be relied on and corrected these misstatements in a subsequent filing.

During the year the issuer acquired multiple businesses and engaged a specialist to assist it in determining the fair values of certain acquired assets using various significant assumptions. The following deficiency was identified: · For certain acquired assets in these business combinations the firm did not perform any procedures to evaluate the reasonableness of certain significant assumptions developed by the company's specialist or developed by the issuer including evaluating significant differences between the useful lives assigned to these assets and the cash flow forecast periods used to determine their fair values. (AS 1105.A8b; AS 2501.16)

During the year the issuer acquired multiple businesses and engaged a specialist to assist it in determining the fair values of certain acquired assets using various significant assumptions. The following deficiency was identified: · For two of these business combinations the firm used an auditor-employed specialist to evaluate another significant assumption developed by the company's specialist and used in the measurement of these acquired assets. The firm did not identify that the auditor-employed specialist did not perform any procedures to evaluate this assumption. (AS 1105.A8b; AS 1201.C6 and .C7)

During the year the issuer acquired multiple businesses and engaged a specialist to assist it in determining the fair values of certain acquired assets using various significant assumptions. The following deficiency was identified: · For one of these business combinations the firm used an auditor-engaged specialist to assist it with testing the fair value of another acquired asset which was determined by the company's specialist. The firm did not identify that the auditor-engaged specialist did not perform any procedures to evaluate the reasonableness of the significant assumptions developed by the company's specialist. (AS 1105.A8b; AS 1210.09 and .12)

During the year the issuer acquired multiple businesses and engaged a specialist to assist it in determining the fair values of certain acquired assets using various significant assumptions. The following deficiency was identified: · For one of these business combinations the firm used an auditor-engaged specialist to assist it with testing the fair value of another acquired asset which was determined by the company's specialist. The firm did not perform any procedures to evaluate the relevance and reliability of certain information used by the company's specialist in determining the fair value of this asset. (AS 1105.A8a)

For certain business combinations the firm did not perform any procedures to test the fair values of certain other acquired assets. (AS 2501.07)

For two business combinations the firm did not perform any procedures to test the existence of certain of these assets upon acquisition. (AS 2301.08)

For two business combinations the firm's approach for substantively testing the fair values of the provisions for contingent consideration to be paid to the sellers was to develop independent expectations of the estimates using an auditor-employed specialist. The following deficiency was identified: · The firm did not perform any procedures to evaluate the reasonableness of certain significant assumptions developed by the issuer which were also used by the firm to develop its independent expectations. (AS 2501.16)

For two business combinations the firm's approach for substantively testing the fair values of the provisions for contingent consideration to be paid to the sellers was to develop independent expectations of the estimates using an auditor-employed specialist. The following deficiency was identified: · For one of these business combinations the firm did not evaluate a significant difference between the firm's independent expectation and the issuer's recorded contingent consideration. (AS 2810.13)

For two business combinations the firm's approach for substantively testing the fair values of the provisions for contingent consideration to be paid to the sellers was to develop independent expectations of the estimates using an auditor-employed specialist. The following deficiency was identified: · For the other business combination the firm used the auditor-employed specialist to evaluate a significant assumption developed by the company's specialist which was also used by the firm to develop its independent expectation. The firm did not identify that the auditor-employed specialist did not perform any procedures to evaluate this assumption. (AS 1105.A8b; AS 1201.C6 and .C7)

For certain business combinations the firm did not identify and evaluate the issuer's omission of certain disclosures required under FASB ASC Topic 805 and FASB ASC Topic 820 related to certain assets acquired. (AS 2810.30 and .31)

During the year the issuer invested in an entity. The following deficiency was identified: · The firm did not evaluate whether the business purpose (or lack thereof) of this investment indicated that it may have been entered into to engage in fraudulent financial reporting given certain facts regarding this investment. (AS 2401.67) Unrelated to our review the issuer reevaluated its accounting for this investment and concluded that a material misstatement existed that had not been previously identified. The issuer corrected this misstatement in a subsequent filing.

For two types of revenue the firm did not evaluate whether the issuer was acting as a principal or as an agent. (AS 2301.08 and .13)