Business Combinations
520 deficiencies · 12 led to a wrong opinion · 194 on a significant-risk area
How audits fail in Business Combinations
The recurring ways firms fell short. Click any one to read the real inspection findings.
- Estimate assumptions not evaluated155
The firm didn't sufficiently evaluate the reasonableness of the significant assumptions behind an estimate.
3 wrong opinion79 significant risk - Reliance on a specialist or pricing service91
The firm relied on a specialist, pricing service, or third party without sufficiently evaluating that work.
41 significant risk - Accuracy/completeness of client data not tested62
The firm used issuer-prepared schedules, reports, or system data without testing that they were accurate and complete.
2 wrong opinion20 significant risk - Accounting or disclosure treatment not evaluated53
The firm didn't evaluate whether the accounting or disclosures conformed with GAAP, or didn't identify departures from GAAP or omitted disclosures.
1 wrong opinion17 significant risk - Management review controls not fully evaluated52
The firm tested a management review control but didn't evaluate the specific procedures the reviewer performed, or the control's precision.
3 wrong opinion14 significant risk - Estimate method, model, or data not evaluated40
The firm didn't evaluate the method, model, or underlying data the issuer used to develop an estimate or fair value.
1 wrong opinion13 significant risk - Little or no substantive testing37
The firm performed little or no substantive testing over the account, disclosure, or assertion.
1 wrong opinion7 significant risk - Other testing deficiency18
A deficiency that doesn't fall into one of the more specific patterns above.
1 wrong opinion - Sample too small or unsupported6
The sample the firm tested was too small, or the basis for the sample size didn't support the conclusion.
2 significant risk - Controls not identified or tested5
The firm didn't identify and/or test controls it needed to rely on for the account or assertion.
1 significant risk - Confirmations / alternative procedures1
The firm didn't obtain confirmations, or didn't perform sufficient alternative procedures when confirmations weren't returned.