Explorer

The issuer reported right-of-use assets and lease liabilities. The issuer performed a recoverability test to determine whether these assets were impaired that included cash flows for years beyond the terms of the leases. The firm's approach for substantively testing the recoverability test was to test the issuer's process. The firm did not sufficiently evaluate the reasonableness of cash flow projections used in the issuer's recoverability test because it did not take into account the issuer's ability to carry out the cash flow projections including its ability to generate cash flows for the years after the end of the terms of the leases. (AS 2501.16 and .17)

The issuer engaged specialists to determine the fair value of certain leased assets using various data and assumptions. The following deficiencies were identified: · The firm did not evaluate the reasonableness of significant assumptions used by the company's specialists. (AS 1105.A8b)