Deloitte LLP

Canada · Deloitte Touche Tohmatsu Limited · Triennially Inspected

Deficiencies (3)

Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.

#	Area	Deficiency	Standard
1	Revenue	The firm identified a control deficiency in that the component had not designed and implemented a control over review of new contracts and amendments for the first three quarters of the year. In response to the control deficiency identified the component designed and implemented and the firm tested a control in the fourth quarter that consisted of the review of new or amended contracts with customers whose annual sales exceeded an established threshold for appropriate revenue recognition. In testing this control the firm did not evaluate whether the threshold the control owner used to select contracts for review was sufficiently precise to detect misstatements that could be material. (AS 2201.68) Both financial statement and ICFR audits	AS 2201.68
2	Revenue	The sample size the firm used in certain of its substantive procedures to test revenue was too small to provide sufficient appropriate audit evidence because these procedures were designed based on a level of control reliance that was not supported due to the deficiency in the firm's control testing discussed above. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A) Both financial statement and ICFR audits	AS 2301.16; AS 2301.18; AS 2301.37; AS 2315.19; AS 2315.23; AS 2315.23A
3	Revenue	The firm did not perform any substantive procedures to test sales returns. (AS 2301.08) Both financial statement and ICFR audits	AS 2301.8