For one of these two types of revenue the firm developed its expectation for one of its analytical procedures using data derived from the recorded amounts of revenue. The firm did not evaluate whether this data was sufficiently reliable for purposes of achieving its audit objectives. (AS 2305.16)
Both financial statement and ICFR audits · full report
United States · Grant Thornton International Limited
Accounts Receivable
Other testing deficiency
The issuer entered into revenue arrangements with multiple elements including arrangements that contained fees contingent upon the resolution of certain matters that were beyond the issuer's control (“contingent fees”). The issuer's policy was to recognize revenue and the related receivable from certain arrangements that contained contingent fees when services were provided which generally occurred before the resolution of the contingent matters. The following deficiencies were identified: · In addition the firm did not identify and appropriately address the inconsistency between the issuer's accounting for this revenue and its disclosure that it recognized revenue when the fee was fixed or determinable and collectability was reasonably assured. (AS 2810.30 and .31)
Both financial statement and ICFR audits · full report
The firm did not evaluate whether the issuer measured its allowance for doubtful accounts receivable ('allowance') using a probability-weighted amount that was determined by evaluating a range of possible outcomes as required by the issuer's applicable financial reporting framework. (AS 2810.30)