- Inspection year
- 2018
- Report date
- 05-Aug-2020
- PCAOB release
- 104-2020-015
- Audits reviewed
- 10
- Audits w/ Part I.A deficiencies
- 4
- Part I.A deficiency rate
- 40%
- Part I.A deficiencies
- 4
- Part I.B deficiencies
- 1
- Report
- View PDF ↗
Deficiencies (4)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Business Combinations | During the year the issuer acquired multiple businesses and used an external specialist to determine the fair values of the assets acquired and the liabilities assumed. The firm's approach for testing these fair values was to review and test management's process. The firm did not evaluate the reasonableness of assumptions used by the specialist to determine the fair values of the assets acquired and the liabilities assumed. (AS 2502.26 and .28) Financial statement audit only | AS 2502.26; AS 2502.28 |
Issuer B1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm did not perform any procedures to test or in the alternative test any controls over the accuracy and completeness of system-generated reports used in its substantive testing of certain revenue transactions. (AS 1105.10) Financial statement audit only | AS 1105.10 |
Issuer C1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Inventory | The issuer's products had expiration dates and the issuer determined that a reserve for excess or obsolete inventory was not necessary. In its testing of the process including assumptions used by management to evaluate the need for an inventory reserve the firm did not evaluate whether the issuer's products could be sold at or above cost prior to their expiration dates. (AS 2501.11) Financial statement audit only | AS 2501.11 |
Issuer D1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Inventory | The issuer's products consisted of various categories and each category included numerous individual parts. The issuer determined that a reserve for excess or obsolete inventory was not necessary. In its testing of the process including assumptions used by management to evaluate the need for a reserve for excess and obsolete inventory the firm only performed procedures at the product level and did not consider individual parts for excess quantities or obsolescence. (AS 2501.11) Financial statement audit only | AS 2501.11 |