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Grant Thornton Auditores Independentes
Brazil · Grant Thornton International Limited · Triennially Inspected
- Inspection year
- 2019
- Report date
- 19-May-2021
- PCAOB release
- 104-2021-106
- Audits reviewed
- 3
- Audits w/ Part I.A deficiencies
- 3
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 8
- Part I.B deficiencies
- 1
- Report
- View PDF ↗
Deficiencies (8)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Accounts Receivable | The firm selected for testing a control over management's review of the allowance for doubtful accounts calculation. The firm did not evaluate the review procedures that the control owner performed to assess the reasonableness of the assumptions used to determine the allowance including the procedures to identify items for follow up and the procedures to determine whether those items were appropriately resolved. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 2 | Accounts Receivable | The firm's approach for substantively testing the allowance for doubtful accounts was to review and test management's process. The firm did not sufficiently evaluate the reasonableness of the allowance because the firm did not perform procedures to test the reasonableness of the reserve percentages used by the issuer to estimate the allowance for doubtful accounts. (AS 2501.09 .10 and .11) Both financial statement and ICFR audits | AS 2501.9; AS 2501.10; AS 2501.11 |
Issuer B2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Accounts Receivable | The firm was instructed by the principal auditor to audit the financial statements and the effectiveness of ICFR of a subsidiary of the issuer to support the principal auditor's opinions on the consolidated financial statements and ICFR. The firm identified control deficiencies in controls that it had selected for testing over revenue accounts receivable and inventory for the subsidiary's two branches. The firm did not evaluate the severity of certain identified control deficiencies in accordance with the instructions of the principal auditor. (AS 2201.62) Both financial statement and ICFR audits | AS 2201.62 | |
| 2 | Accounts Receivable | The sample sizes the firm used in certain of its substantive procedures to test revenue accounts receivable and inventory for both branches were 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 deficiencies 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 |
Issuer C4 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Accounts Receivable | The firm was instructed by the principal auditor to audit the financial statements and the effectiveness of ICFR of two of the issuer's subsidiaries to support the principal auditor's opinions on the consolidated financial statements and ICFR. The issuer's processes related to revenue accounts receivable and inventory included automated transactions initiated processed and recorded by information technology ('IT') systems at both subsidiaries. The firm selected for testing automated and IT-dependent manual controls over revenue accounts receivable and inventory that used data and reports generated by the IT systems. The firm's approach to test the accuracy and completeness of the data and reports depended on effective IT general controls ('ITGCs'). For one subsidiary the firm identified several control deficiencies related to ITGCs. The firm did not evaluate the severity of the identified control deficiencies in accordance with the instructions of the principal auditor. (AS 2201.62) Both financial statement and ICFR audits | AS 2201.62 | |
| 2 | Accounts Receivable | The firm was instructed by the principal auditor to audit the financial statements and the effectiveness of ICFR of two of the issuer's subsidiaries to support the principal auditor's opinions on the consolidated financial statements and ICFR. The issuer's processes related to revenue accounts receivable and inventory included automated transactions initiated processed and recorded by information technology ('IT') systems at both subsidiaries. The firm selected for testing automated and IT-dependent manual controls over revenue accounts receivable and inventory that used data and reports generated by the IT systems. The firm's approach to test the accuracy and completeness of the data and reports depended on effective IT general controls ('ITGCs'). For the other subsidiary the firm did not test ITGCs or obtain confirmation from the principal auditor that ITGCs were not in scope for testing. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 3 | Accounts Receivable | The firm was instructed by the principal auditor to audit the financial statements and the effectiveness of ICFR of two of the issuer's subsidiaries to support the principal auditor's opinions on the consolidated financial statements and ICFR. The issuer's processes related to revenue accounts receivable and inventory included automated transactions initiated processed and recorded by information technology ('IT') systems at both subsidiaries. The firm selected for testing automated and IT-dependent manual controls over revenue accounts receivable and inventory that used data and reports generated by the IT systems. The firm's approach to test the accuracy and completeness of the data and reports depended on effective IT general controls ('ITGCs'). For one subsidiary the firm identified several control deficiencies related to ITGCs. The firm did not evaluate the severity of the identified control deficiencies in accordance with the instructions of the principal auditor. (AS 2201.62) For the other subsidiary the firm did not test ITGCs or obtain confirmation from the principal auditor that ITGCs were not in scope for testing. (AS 2201.39) As a result the firm's testing of the automated and IT-dependent manual controls over revenue accounts receivable and inventory for these two subsidiaries was not sufficient. (AS 2201.46) Both financial statement and ICFR audits | AS 2201.46 | |
| 4 | Accounts Receivable | The sample sizes the firm used in certain of its substantive procedures to test revenue accounts receivable and inventory for both subsidiaries were 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 deficiencies 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 |