Explorer

The firm's internal inspection program inspected this audit and reviewed the Inventory and Journal Entries areas but did not identify the deficiencies below. For certain business units the issuer used an IT system to initiate process and record transactions related to inventory and revenue. In its testing of controls over these accounts the firm tested various automated controls that used data generated or maintained by this IT system. The firm selected for testing a control over change management for this system but did not evaluate whether this control was designed to address all program changes. (AS 2201.42)

The firm's internal inspection program inspected this audit and reviewed the Inventory and Journal Entries areas but did not identify the deficiencies below. For certain business units the issuer used an IT system to initiate process and record transactions related to inventory and revenue. In its testing of controls over these accounts the firm tested various automated controls that used data generated or maintained by this IT system. The firm selected for testing a control over change management for this system but did not evaluate whether this control was designed to address all program changes. As a result of the deficiency in the firm's testing of the ITGC the firm's testing of these automated controls was not sufficient. (AS 2201.46)

The firm's internal inspection program inspected this audit and reviewed the Inventory and Journal Entries areas but did not identify the deficiencies below. For certain inventory which was affected by the ITGC testing deficiencies discussed above the following additional deficiencies related to the firm's testing of controls were identified: · The firm selected for testing an automated control over inventory costing. The firm did not sufficiently test the design and operating effectiveness of this control as it limited its testing to only certain scenarios without identifying and evaluating all relevant configurations. (AS 2201.42 and .44)

The firm's internal inspection program inspected this audit and reviewed the Inventory and Journal Entries areas but did not identify the deficiencies below. For certain inventory which was affected by the ITGC testing deficiencies discussed above the following additional deficiencies related to the firm's testing of controls were identified: · The firm selected for testing an automated control over inventory costing. The firm did not identify that this control was not designed to address whether inventory was valued in accordance with the issuer's policy. (AS 2201.42)

The firm's internal inspection program inspected this audit and reviewed the Inventory and Journal Entries areas but did not identify the deficiencies below. For certain inventory which was affected by the ITGC testing deficiencies discussed above the following additional deficiencies related to the firm's testing of controls were identified: · The firm did not identify and test any controls over an input the issuer used in determining the cost of inventory. (AS 2201.39)

The firm's internal inspection program inspected this audit and reviewed the Inventory and Journal Entries areas but did not identify the deficiencies below. For certain inventory which was affected by the ITGC testing deficiencies discussed above the following additional deficiencies related to the firm's testing of controls were identified: · The issuer performed cycle counts of inventory and the issuer's cycle-count policy required inventory to be counted at specific frequencies during the year. The firm selected for testing controls that consisted of the issuer's review of cycle-count results. The firm did not test the aspects of one of these controls that addressed whether inventory counts were performed in accordance with the issuer's designated count frequency in its cycle-count policy. (AS 2201.42 and .44)

The firm's internal inspection program inspected this audit and reviewed the Inventory and Journal Entries areas but did not identify the deficiencies below. For certain inventory which was affected by the ITGC testing deficiencies discussed above the following additional deficiencies related to the firm's testing of controls were identified: · The issuer performed cycle counts of inventory and the issuer's cycle-count policy required inventory to be counted at specific frequencies during the year. The firm selected for testing controls that consisted of the issuer's review of cycle-count results. The firm did not identify and test any controls over the accuracy and completeness of certain information used in the operation of these controls. (AS 2201.39)

The firm's internal inspection program inspected this audit and reviewed the Inventory and Journal Entries areas but did not identify the deficiencies below. For certain inventory which was affected by the ITGC testing deficiencies discussed above the following additional deficiencies related to the firm's testing of controls were identified: · The firm identified exceptions in its substantive testing of the existence of inventory but did not evaluate the effect of these exceptions on the effectiveness of the issuer's cycle-count controls. (AS 2201.B8)

The firm's internal inspection program inspected this audit and reviewed the Inventory and Journal Entries areas but did not identify the deficiencies below. The firm's substantive procedures to test the unit cost of this inventory consisted of selecting a sample of items for testing. The firm did not perform sufficient procedures to test the unit cost because it inspected supporting documentation for only a portion of the quantity of these items held at year end. (AS 2301.08)

The firm's internal inspection program inspected this audit and reviewed the Inventory and Journal Entries areas but did not identify the deficiencies below. The firm's substantive procedures to test the unit cost of this inventory consisted of selecting a sample of items for testing. The firm did not perform any substantive procedures to test an input used in determining the cost of this inventory. (AS 2301.08)

The issuer used several information-technology (IT) systems to process and record certain revenue at one business unit. The following deficiencies were identified: · The firm selected for testing controls that consisted of the issuer's review of price list changes processed through certain of the issuer's IT systems. The firm did not identify and test any controls over the accuracy and completeness of certain information used in the operation of these controls. (AS 2201.39)

The firm's internal inspection program inspected this audit and reviewed the Inventory and Journal Entries areas but did not identify the deficiencies below. The firm's approach to substantively test certain of the issuer's reserve for excess and obsolete inventory was to develop an independent expectation of the estimate. The firm did not perform procedures to demonstrate it had a reasonable basis for an assumption and the method used to develop its independent expectation. (AS 2501.22)

For certain revenue which was affected by the ITGC testing deficiencies discussed above the issuer recognized revenue when a product was shipped. The firm selected for testing various automated controls over revenue recognition but did not test the aspects of these controls that addressed whether shipment had occurred before revenue was recognized. (AS 2201.42 and .44)

The firm's internal inspection program inspected this audit and reviewed the Inventory and Journal Entries areas but did not identify the deficiencies below. The firm identified a fraud risk related to the potential for management to override controls including recording unsupported journal entries. The firm did not perform any substantive procedures to test journal entries to address this risk at certain business units. (AS 2401.58)

For one type of revenue the firm selected the revenue transactions from the issuer's largest customers for testing but did not perform any substantive procedures to test the remaining portion of this revenue. (AS 1105.27; AS 2301.08 and .13)

For another type of revenue the firm did not perform any substantive procedures to test whether certain performance obligations had been satisfied before revenue was recognized. (AS 2301.08 and .13)

For both of these types of revenue certain of the issuer's arrangements included multiple performance obligations. The firm did not perform any substantive procedures to evaluate whether the issuer's allocation of revenue to separate performance obligations was based on the relative standalone selling prices. (AS 2301.08)

The firm did not perform procedures beyond inquiring of management to test certain deferred revenue. (AS 2301.08)

During the year events or changes in circumstances existed indicating that the carrying value of the issuer's long-lived assets may not be recoverable and the issuer performed assessments of its long-lived assets for possible impairment. The following deficiencies were identified: · The firm did not evaluate whether the issuer in conformity with FASB ASC Topic 350 and FASB ASC Topic 360 performed its assessments of long-lived assets for possible impairment prior to performing an impairment assessment of goodwill. (AS 2301.08)

During the year events or changes in circumstances existed indicating that the carrying value of the issuer's long-lived assets may not be recoverable and the issuer performed assessments of its long-lived assets for possible impairment. The following deficiencies were identified: · The issuer concluded that the carrying amount of one asset group was recoverable. The firm did not identify that the issuer did not consider certain indicators of possible impairment in its assessment of these assets. (AS 2301.08; AS 2810.03)

During the year events or changes in circumstances existed indicating that the carrying value of the issuer's long-lived assets may not be recoverable and the issuer performed assessments of its long-lived assets for possible impairment. The following deficiencies were identified: · The firm's approach for substantively testing the issuer's impairment assessment for a second asset group was to test the issuer's process. The firm did not evaluate whether the issuer had a reasonable basis for its selection of a significant assumption from a range of potential assumptions. (AS 2501.16)

The issuer used several information-technology (IT) systems to process and record certain revenue at one business unit. The following deficiencies were identified: · The firm selected for testing controls that consisted of the issuer's review of price list changes processed through certain of the issuer's IT systems. The firm did not test or test any controls over the completeness of the population of items from which it selected its samples for testing these controls. (AS 1105.10)

During the year events or changes in circumstances existed indicating that the carrying value of the issuer's long-lived assets may not be recoverable and the issuer performed assessments of its long-lived assets for possible impairment. The following deficiencies were identified: · The firm's approach for substantively testing the issuer's impairment assessment for a third asset group was to develop independent expectations of the fair values of these assets. The firm did not perform sufficient procedures to demonstrate it had a reasonable basis for certain significant assumptions it developed because it did not (1) take into account the issuer's intent and ability to carry out these assumptions and (2) demonstrate it had a reasonable basis for its selection of these assumptions from a range of potential assumptions. (AS 2501.22)

During the year events or changes in circumstances existed indicating that the carrying value of the issuer's long-lived assets may not be recoverable and the issuer performed assessments of its long-lived assets for possible impairment. The following deficiencies were identified: · The firm's approach for substantively testing the issuer's impairment assessment for a third asset group was to develop independent expectations of the fair values of these assets. The firm did not evaluate the relevance and reliability of external information used in developing its independent expectations. (AS 1105.04 and .06)

The firm did not sufficiently evaluate whether the issuer's method to estimate depreciation expense for certain assets was in conformity with FASB ASC Topic 360 because it did not evaluate whether the issuer's method of when to start depreciating an asset represented when the asset was placed in service. (AS 2501.10)

The firm did not perform any procedures to evaluate a difference it identified in its testing of long-lived assets. (AS 2301.08)

To identify and select journal entries for testing the firm identified fraud characteristics and obtained a list of all journal entries with these characteristics. The firm did not perform sufficient procedures to test those journal entries because it examined the underlying support for only certain journal entries without having an appropriate rationale for limiting its testing to those certain journal entries. (AS 2401.61)

The issuer recorded certain revenue based on data in an electronic environment that were tracked and provided by a service organization. The firm used certain information produced by this service organization in its substantive testing of this revenue but did not test or test any controls over the accuracy and completeness of this information. (AS 2301.08 and .13)

For a second type of revenue the firm did not evaluate whether revenue was recognized in conformity with certain relevant requirements of FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2301.08 and .13)

For a second type of revenue the firm did not evaluate the reliability of certain external information it used in its substantive testing of this revenue. (AS 1105.04 and .06)

For a third type of revenue the firm did not perform any substantive procedures to test whether performance obligations had been satisfied before revenue was recognized. (AS 2301.08 and .13)

The issuer engaged a specialist to perform an assessment of its goodwill for possible impairment. The firm's approach for substantively testing the issuer's impairment assessment was to test the issuer's process and the firm used an auditor-employed specialist to evaluate certain significant assumptions used. The following deficiencies were identified: · The firm did not evaluate the reasonableness of certain significant assumptions developed by the company's specialist or developed by the issuer. (AS 1105.A8b; AS 2501.16)

The issuer used several information-technology (IT) systems to process and record certain revenue at one business unit. The following deficiencies were identified: · The firm did not identify and test any controls that addressed whether pricing was accurately applied in the recording of revenue. (AS 2201.39)

The issuer engaged a specialist to perform an assessment of its goodwill for possible impairment. The firm's approach for substantively testing the issuer's impairment assessment was to test the issuer's process and the firm used an auditor-employed specialist to evaluate certain significant assumptions used. The following deficiencies were identified: · The firm did not identify that the auditor-employed specialist did not evaluate the relevance of external information used by the company's specialist to develop certain other significant assumptions. (AS 1105.A8a; AS 1201.C6 and .C7)

During the year events or changes in circumstances existed indicating that the carrying value of the issuer's long-lived assets may not be recoverable. The firm did not evaluate whether the issuer performed an assessment of long-lived assets for possible impairment which in conformity with FASB ASC Topic 350 and FASB ASC Topic 360 was required to be performed prior to performing an impairment assessment of goodwill. (AS 2301.08 and .11)

The issuer performed an assessment of its digital assets for possible impairment. The firm used certain external information in its testing of the issuer's impairment assessment but did not evaluate the relevance and reliability of this information. (AS 1105.04 and .06)

The issuer recognized certain revenue over time based on labor costs incurred to date relative to total estimated labor costs to complete the contract. The following deficiencies were identified: · For projects designated as complete the firm did not perform sufficient procedures to evaluate whether the method used by the issuer to record revenue was in conformity with FASB ASC Topic 606 because it did not evaluate (1) whether the performance obligations were satisfied and (2) certain evidence that suggested these projects were not complete. (AS 2501.10; AS 2810.03)

The issuer recognized certain revenue over time based on labor costs incurred to date relative to total estimated labor costs to complete the contract. The following deficiencies were identified: · For projects designated as in-process the firm did not sufficiently evaluate the reasonableness of the issuer's significant assumption related to total estimated labor hours because it did not evaluate significant differences between this assumption and the issuer's recent experience. (AS 2501.16)

The issuer recognized certain revenue over time based on labor costs incurred to date relative to total estimated labor costs to complete the contract. The following deficiencies were identified: · The firm did not perform any procedures to evaluate certain differences it identified in its testing of labor costs incurred. (AS 2301.08 and .13)

For another type of revenue the firm did not perform any substantive procedures to test whether the performance obligations had been satisfied before revenue was recognized. (AS 2301.08 and .13)

For a third type of revenue the firm did not perform any substantive procedures to evaluate the terms and conditions included in customer contracts. (AS 2301.08 and .13)

The firm did not identify and evaluate the issuer's omission of certain disclosures required under FASB ASC Topic 606. (AS 2810.30 and .31)

The firm sent positive confirmation requests to the issuer's customers for a sample of accounts receivable. The following deficiencies were identified: · For one confirmation that was returned with exceptions the firm did not evaluate the nature of those exceptions. (AS 2310.33)

For revenue at three business units one of which was affected by the audit deficiencies discussed above the following additional deficiencies were identified: · The firm did not evaluate whether the issuer was acting as a principal or as an agent. (AS 2301.08)

The firm sent positive confirmation requests to the issuer's customers for a sample of accounts receivable. The following deficiencies were identified: · For certain confirmations that were not returned the firm did not perform alternative procedures that provided sufficient appropriate audit evidence that these balances represented valid receivables as of the confirmation date. (AS 2310.31)

The firm observed the issuer's physical counts and performed independent test counts of inventory after year end. The following deficiencies were identified: · The firm did not perform any procedures to test the existence of a certain type of inventory. (AS 2301.08)

The firm observed the issuer's physical counts and performed independent test counts of inventory after year end. The following deficiencies were identified: · The firm did not perform procedures beyond inquiring of management to test intervening transactions between year end and the date of its inventory observations. (AS 2510.12)

The firm's substantive procedures to test the unit cost of inventory consisted of selecting a sample of items for testing. For certain items in its sample the firm did not perform sufficient procedures to test the unit cost because its procedures were limited to comparing the recorded raw materials cost to supporting documentation for the most recent purchase. (AS 2301.08)

The firm's substantive procedures to test the unit cost of inventory consisted of selecting a sample of items for testing. For certain other items in its sample the firm did not perform any procedures to test the raw materials cost and/or the labor and overhead costs allocated to these items. (AS 2301.08)

The firm did not perform any procedures to evaluate whether certain inventory was recorded at the lower of cost or net realizable value. (AS 2301.08)