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KPMG Auditores Independentes Ltda
Brazil · KPMG International Cooperative · Triennially Inspected
- Inspection year
- 2019
- Report date
- 06-Jul-2021
- PCAOB release
- 104-2021-136a
- Audits reviewed
- 3
- Audits w/ Part I.A deficiencies
- 2
- Part I.A deficiency rate
- 67%
- Part I.A deficiencies
- 13
- Part I.B deficiencies
- —
- Report
- View PDF ↗
Deficiencies (13)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A7 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Significant Estimates | The issuer used various models and assumptions to determine the estimate. The following deficiencies were identified: · The firm selected for testing controls that consisted of the review and approval of certain assumptions used to determine the estimate. The firm did not identify and test any controls over the accuracy and completeness of data used in the operation of these controls. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 2 | Significant Estimates | The issuer used various models and assumptions to determine the estimate. The following deficiencies were identified: · The firm did not identify and test any controls over the monitoring of the models to determine whether the models remained suitable for their intended purpose or if revisions to the models were necessary. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 3 | Significant Estimates | The issuer used various models and assumptions to determine the estimate. The following deficiencies were identified: · The firm selected for testing controls that consisted of annual reviews and approvals of (1) the methodologies (2) new and revised models and (3) certain key inputs and assumptions used by the issuer to determine a portion of the estimate. Certain annual reviews and approvals of the methodologies and new and revised models did not operate during the current year and the firm tested instances of these controls which operated in the prior year. The firm's testing of these controls did not provide sufficient appropriate audit evidence of the controls' operating effectiveness as of the date of management's assessment of ICFR due to the (1) length of time that had passed between the instances of the controls the firm tested and the date of management's assessment (2) higher risk associated with the controls and (3) sensitivity and complexity of the models covered by the controls. (AS 2201.46 and .52) Both financial statement and ICFR audits | AS 2201.46; AS 2201.52 | |
| 4 | Significant Estimates | The issuer used various models and assumptions to determine the estimate. The following deficiencies were identified: · The firm selected for testing controls that consisted of annual reviews and approvals of (1) the methodologies (2) new and revised models and (3) certain key inputs and assumptions used by the issuer to determine a portion of the estimate. Certain annual reviews and approvals of the methodologies and new and revised models did not operate during the current year and the firm tested instances of these controls which operated in the prior year. For certain of the controls over the methodologies new and revised models and certain key inputs and assumptions the firm did not evaluate the review procedures that the control owners performed including the procedures to identify items for follow up and 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 | |
| 5 | Significant Estimates | The issuer used various models and assumptions to determine the estimate. The following deficiencies were identified: · The firm selected for testing two other controls that consisted of the review and approval of certain assumptions or data supporting the assumptions used by the issuer to determine another portion of the estimate. For one of these controls the firm did not test an aspect of the control related to an annual update of the assumptions. Further the firm did not sufficiently test the completeness of the report from which it selected its samples to test the design and operating effectiveness of the control because the firm did not agree the report data to the source system. For the other control the firm did not test an aspect of the control related to an annual update of the data supporting the assumptions. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 6 | Significant Estimates | The issuer used various models and assumptions to determine the estimate. The following deficiencies were identified: · The firm's approach for substantively testing the estimate was to review and test management's process. The firm did not sufficiently evaluate the reasonableness of the estimate because the firm did not (1) obtain an understanding of the issuer's process for determining certain assumptions and (2) perform procedures to test certain factors and assumptions used by the issuer to determine the estimate. (AS 2501.09 .10 and .11) Both financial statement and ICFR audits | AS 2501.9; AS 2501.10; AS 2501.11 | |
| 7 | Significant Estimates | The issuer used various models and assumptions to determine the estimate. The following deficiencies were identified: · The sample sizes the firm used in certain of its substantive procedures to test the estimate 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 B6 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue and Related Accounts | The firm did not identify and test any controls over the (1) approval of prices (2) entry of customer orders for both domestic and export sales into the general ledger (3) accuracy of the bills of lading information entered into the general ledger used to initially recognize revenue for export sales and (4) deferral of revenue at year end related to certain export sales. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 2 | Revenue and Related Accounts | At the end of each year the issuer calculated and recorded an adjustment to defer a portion of revenue related to domestic and certain export sales for which the revenue recognition criteria had not been met. The firm did not identify and test any controls over the accuracy and completeness of the reports used by the issuer to identify sales transactions related to domestic and certain other export sales for which the revenue recognition criteria had not been met. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 3 | Revenue and Related Accounts | The sample sizes the firm used in certain of its substantive procedures to test revenue and accounts receivable 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 | |
| 4 | Long-Lived Assets | The firm did not identify and test any controls over the (1) recording of additions and disposals of long-lived assets including whether these were recorded in the correct period (2) classification of long-lived assets and whether these were depreciated over the appropriate useful lives and (3) configuration of the system responsible for the calculation of depreciation expense. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 5 | Long-Lived Assets | The sample sizes the firm used in certain of its substantive procedures to test long-lived assets 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 | |
| 6 | Long-Lived Assets | The firm did not test whether (1) long-lived assets were appropriately classified to ensure that these assets were depreciated over the appropriate useful lives and (2) all disposals of long-lived assets were recorded by the issuer. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 |