- Inspection year
- 2020
- Report date
- 30-Sep-2021
- PCAOB release
- 104-2021-149a
- Audits reviewed
- 24
- Audits w/ Part I.A deficiencies
- 13
- Part I.A deficiency rate
- 54%
- Part I.A deficiencies
- 57
- Part I.B deficiencies
- 6
- Report
- View PDF ↗
Deficiencies (57)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A19 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer used multiple information-technology (IT) systems to initiate process and record transactions. In its testing of controls over certain revenue and related accounts the firm tested various IT-dependent manual controls that used data and reports generated or maintained by certain of these IT systems. As a result of the following deficiencies in the firm's testing of IT general controls (ITGCs) the firm's testing of these IT-dependent controls was not sufficient. (AS 2201.46) Both financial statement and ICFR audits | AS 2201.46 | |
| 2 | Revenue | With respect to user access: · The firm selected for testing a control over the periodic review of user access for each of these IT systems. The firm did not evaluate whether items identified by the control owners for follow up were appropriately resolved. (AS 2201.44) Both financial statement and ICFR audits | AS 2201.44 | |
| 3 | Revenue | With respect to user access: · The firm did not identify and test any controls over the accuracy and completeness of certain reports used in the operation of this control. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 4 | Revenue | With respect to user access: · The firm selected for testing a control over the approval of new or modified user access for each of these IT systems. The firm did not test the operating effectiveness of (1) this control for one of these systems and (2) the aspect of this control related to the modification of access for existing users for certain other of these systems. Further in its testing of the operating effectiveness of this control for certain IT systems the firm tested fewer items than the sample size it calculated. (AS 2201.44) Both financial statement and ICFR audits | AS 2201.44 | |
| 5 | Revenue | With respect to user access: · The firm selected for testing a control over the removal of access for terminated employees. For one of these IT systems the firm did not evaluate the control owner's procedures to determine whether access was appropriately removed for users identified as terminated. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 6 | Revenue | With respect to both user access and change management: · For certain IT systems the firm did not (1) identify and test controls and/or (2) test identified controls that addressed certain risks over change management and user access. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 7 | Revenue | With respect to both user access and change management: · For one of these IT systems the firm selected for testing controls related to (1) the monitoring of database changes and (2) privileged access review but did not perform any procedures beyond inquiry to test the design and operating effectiveness of these controls. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 8 | Revenue | With respect to both user access and change management: · For each of these IT systems the firm did not perform any substantive procedures to test or in the alternative test any controls over the completeness of certain system-generated reports that it used to make its selections for testing controls over change management and/or user access. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 9 | Revenue | As a result of the audit deficiencies discussed above the firm did not perform sufficient substantive procedures to test or sufficiently test controls over (1) the completeness of certain system-generated reports that the firm used to make its selections to test various controls over certain revenue and related accounts and (2) the accuracy of certain system-generated data it used in its substantive testing of certain revenue and related accounts. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 10 | Revenue | The issuer recognized certain revenue from contracts using a measure of progress method. The following deficiencies were identified: · The firm selected for testing controls over the review and approval of certain of this revenue. The firm did not evaluate the review procedures that the control owners performed 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 | |
| 11 | Revenue | The issuer recognized certain revenue from contracts using a measure of progress method. The following deficiencies were identified: · The firm did not identify and test any controls over the accuracy and completeness of certain data used in the operation of these controls. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 12 | Revenue | The issuer recognized certain revenue from contracts using a measure of progress method. The following deficiencies were identified: · For certain of this revenue the firm did not identify and test any controls over the accuracy and completeness of labor hours that were an input into the issuer's calculation of this revenue. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 13 | Revenue | The issuer recognized certain revenue from contracts using a measure of progress method. The following deficiencies were identified: · For certain of this revenue the firm did not perform substantive procedures to test or sufficiently test controls over the accuracy of certain data it used in its substantive testing. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 14 | Revenue | The issuer recognized certain revenue from contracts using a measure of progress method. The following deficiencies were identified: · For this revenue at one business unit the firm did not perform any substantive procedures to evaluate the reasonableness of the estimated costs to complete open contracts. (AS 2501.07) Both financial statement and ICFR audits | AS 2501.7 | |
| 15 | Revenue | The issuer recognized certain revenue from contracts using a measure of progress method. The following deficiencies were identified: · For certain of this revenue at another business unit the firm did not obtain sufficient appropriate audit evidence regarding the accuracy of estimated total units to be completed. (AS1105.10; AS 2501.11) Both financial statement and ICFR audits | AS 1105.10; AS 2501.11 | |
| 16 | Revenue | The issuer recognized certain revenue from contracts using a measure of progress method. The following deficiencies were identified: · Fir certain other revenue at this business unit the firm did not perform any procedures to evaluate whether revenue was recorded in the appropriate period. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 | |
| 17 | Revenue | The sample sizes the firm used in certain of its substantive procedures to test revenue and related accounts were too small to provide sufficient appropriate audit evidence because these procedures were designed based upon 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 | |
| 18 | Accounts Receivable | The firm sent positive confirmation requests to the issuer's customers for a sample of accounts receivable. The following deficiencies were identified: · For certain items in its sample the responses were returned by email. The firm did not consider performing any procedures to verify the source of these responses. (AS 2310.29) Both financial statement and ICFR audits | AS 2310.29 | |
| 19 | Accounts Receivable | The firm sent positive confirmation requests to the issuer's customers for a sample of accounts receivable. The following deficiencies were identified: · For certain confirmations that were not returned the firm did not perform alternative procedures that provided sufficient appropriate audit evidence that these balances represented valid receivables as of the confirmation date. (AS 2310.31) Both financial statement and ICFR audits | AS 2310.31 |
Issuer B10 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Derivatives | The issuer used multiple IT systems to initiate process and record transactions related to certain revenue and derivatives. The firm tested ITGCs for these IT systems. The following deficiencies were identified: · The firm did not perform any substantive procedures to test or in the alternative test any controls over the completeness of the system-generated reports that it used to select its sample for testing controls over change management for certain of these systems. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 2 | Derivatives | The issuer used multiple IT systems to initiate process and record transactions related to certain revenue and derivatives. The firm tested ITGCs for these IT systems. The following deficiencies were identified: · The firm selected for testing a control over the segregation of duties related to the ability to develop and implement changes to these IT systems. In its testing of the operating effectiveness of this control for certain of these systems the firm did not test whether users with the ability to implement changes also had the ability to develop changes. (AS 2201.44) Both financial statement and ICFR audits | AS 2201.44 | |
| 3 | Derivatives | The issuer used multiple IT systems to initiate process and record transactions related to certain revenue and derivatives. The firm tested ITGCs for these IT systems. The following deficiencies were identified: · The firm selected for testing a control over the approval of new or modified user access to these IT systems. In its testing of the operating effectiveness of this control the firm (1) excluded certain types of new users from its testing population and (2) did not test the aspect of this control related to the modification of access for existing users. (AS 2201.44) Both financial statement and ICFR audits | AS 2201.44 | |
| 4 | Derivatives | The issuer used multiple IT systems to initiate process and record transactions related to certain revenue and derivatives. The firm tested ITGCs for these IT systems. The following deficiencies were identified: · The firm selected for testing a control over the removal of access to these systems for terminated users. The firm identified an exception in the operation of this control but did not evaluate the effect of this exception on the operating effectiveness of this control. (AS 2201.48) Both financial statement and ICFR audits | AS 2201.48 | |
| 5 | Derivatives | The issuer used multiple IT systems to initiate process and record transactions related to certain revenue and derivatives. The firm tested ITGCs for these IT systems. The following deficiencies were identified: · The firm selected for testing a control over the periodic review of user access. For certain of these systems the firm did not identify and test any controls over the accuracy and completeness of the reports that the control owners used in the operation of this control. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 6 | Derivatives | The issuer used multiple IT systems to initiate process and record transactions related to certain revenue and derivatives. The firm tested ITGCs for these IT systems. The following deficiencies were identified: · The firm tested various automated controls over this revenue and derivatives that used data from certain of these IT systems. As a result of the deficiencies in the firm's testing of ITGCs discussed above the firm's testing of these automated controls was not sufficient. (AS 2201.46) Both financial statement and ICFR audits | AS 2201.46 | |
| 7 | Derivatives | The issuer calculated certain revenue and recorded the fair value of its derivatives based on security prices it obtained from external pricing services. The firm did not identify and test any controls over the reliability of the prices obtained from the external pricing services. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 8 | Derivatives | The sample sizes the firm used in certain of its substantive procedures to test this revenue were too small to provide sufficient appropriate audit evidence because these procedures were designed based upon 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 | |
| 9 | Debt | The firm identified a deficiency in ITGCs for certain of the issuer's systems related to individuals having inappropriate administrative rights to these systems. The firm identified a compensating control related to the issuer's monthly reviews of financial information. The firm did not evaluate the review procedures that the control owners performed including the procedures to identify items for follow up and the procedures to determine whether those items were appropriately resolved. Further the firm did not identify that the control owners used data in the performance of this control that were produced by the systems that were subject to the inappropriate access deficiency. (AS 2201.68) Both financial statement and ICFR audits | AS 2201.68 | |
| 10 | Debt | The firm tested various IT-dependent manual controls that used data generated or maintained by these systems. As a result of the deficiencies in the firm's compensating control testing discussed above the firm's testing of these IT-dependent manual controls was not sufficient. (AS 2201.46) Both financial statement and ICFR audits | AS 2201.46 |
Issuer C5 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm's substantive procedures to test revenue consisted of performing a test of details for the first 11 months of the issuer's fiscal year and a substantive analytical procedure for the remaining month. The following deficiencies were identified: · The firm limited its test of details to a smaller number of selections than the sample size it calculated. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 2 | Revenue | The firm's substantive procedures to test revenue consisted of performing a test of details for the first 11 months of the issuer's fiscal year and a substantive analytical procedure for the remaining month. The following deficiencies were identified: · The firm did not perform procedures to test the accuracy and completeness of certain historical data used in its substantive analytical procedure. (AS 2305.16) Financial statement audit only | AS 2305.16 | |
| 3 | Business Combinations | During the year the issuer acquired multiple businesses. The firm performed certain substantive procedures but did not obtain sufficient appropriate audit evidence regarding the reasonableness of the projected financial information used by the issuer to determine the fair value of certain acquired intangible assets and contingent consideration. (AS 2502.26 .28 .31 and .36) Financial statement audit only | AS 2502.26; AS 2502.28; AS 2502.31; AS 2502.36 | |
| 4 | Business Combinations | During the year the issuer created a subsidiary to purchase certain assets from a counterparty. The firm did not evaluate whether due to the terms in the agreement the subsidiary was a variable interest entity under FASB ASC Topic 810 Consolidation. (AS 2810.30) Financial statement audit only | AS 2810.30 | |
| 5 | Business Combinations | The firm did not identify and evaluate the significance to the financial statements of omissions from a required disclosure under FASB ASC Topic 805 Business Combinations. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 |
Issuer D5 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm selected for testing a control that included monthly reviews of certain revenue for four of the issuer's business units. The firm did not evaluate the review procedures that the control owners performed 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 | Revenue | The issuer used multiple IT systems to initiate process and record transactions related to certain revenue at two of these business units. The firm tested controls over user access to these systems. The following deficiencies were identified: · The firm selected for testing a control over the granting or modification of user access. For the first business unit the firm did not test the operating effectiveness of this control. For the second the firm did not test the design and operating effectiveness of the aspect of this control related to the modification of user access. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 3 | Revenue | The issuer used multiple IT systems to initiate process and record transactions related to certain revenue at two of these business units. The firm tested controls over user access to these systems. The following deficiencies were identified: · The firm selected for testing a control over the periodic review of user access. For both business units the firm did not identify and test any controls over the accuracy and completeness of the user access lists that the control owner used in the operation of this control. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 4 | Revenue | The issuer used multiple IT systems to initiate process and record transactions related to certain revenue at two of these business units. The firm tested controls over user access to these systems. The following deficiencies were identified: · As a result of these deficiencies the firm's testing of the accuracy and completeness of data used in the performance of the monthly financial information review control discussed above for these two business units was not sufficient. (AS 2201.46) Both financial statement and ICFR audits | AS 2201.46 | |
| 5 | Revenue | The sample sizes the firm used in certain of its substantive procedures to test this revenue at three of these business units 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 E2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | For certain revenue transactions that occurred throughout the audit period the firm did not identify and test any controls that addressed the risk related to the accuracy of prices and quantities invoiced. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 2 | Revenue | The sample sizes the firm used in certain of its substantive procedures to test this revenue 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 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 |
Issuer F2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm's substantive procedures to test certain revenue consisted of (1) testing a sample of revenue transactions and (2) performing analytical procedures. The following deficiencies were identified: · For certain of the transactions selected for testing the firm did not test whether revenue was recognized according to the contractual terms. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 2 | Revenue | The firm's substantive procedures to test certain revenue consisted of (1) testing a sample of revenue transactions and (2) performing analytical procedures. The following deficiencies were identified: · The firm's analytical procedures consisted of calculating the issuer's gross margin. These procedures did not provide sufficient appropriate audit evidence because the firm did not (1) develop an expectation and (2) establish a threshold for investigation of differences from the expectation. (AS 2305.17 and .20) Financial statement audit only | AS 2305.17; AS 2305.20 |
Issuer G3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Accounts Receivable | The firm did not identify and test any controls over the accuracy of prices and quantities invoiced. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 2 | Accounts Receivable | 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 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 | Inventory | The firm selected for testing a control that consisted of the issuer's performance of a physical inventory count at each location at an interim date and the issuer's roll-forward of these inventory counts to year end. The firm did not perform any procedures to test the aspect of this control related to the issuer's roll-forward procedures. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 |
Issuer H3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Income Taxes | The firm selected for testing a control over the review of the issuer's income tax provision. In its testing of the operating effectiveness of this control the firm did not evaluate whether an item identified by the control owner for follow up was appropriately resolved. (AS 2201.44) Both financial statement and ICFR audits | AS 2201.44 | |
| 2 | Income Taxes | The firm did not perform any substantive procedures to test or in the alternative test any controls over the accuracy and/or completeness of certain data the firm used in its substantive testing of income taxes. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 3 | Income Taxes | The firm did not identify and evaluate the significance to the financial statements of a misstatement in a required disclosure under FASB ASC Topic 740 Income Taxes. (AS 2810.30 and .31) Both financial statement and ICFR audits | AS 2810.30; AS 2810.31 |
Issuer I2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Expenses | The firm performed substantive analytical procedures to test certain expenses. The firm did not determine whether the expectations it used in these analytical procedures were based on predictable relationships. Further the firm identified differences in excess of the firm's established threshold but did not evaluate these differences beyond inquiring of management. (AS 2305.13 .14 and .21) Financial statement audit only | AS 2305.13; AS 2305.14; AS 2305.21 | |
| 2 | Income Taxes | The firm's approach for substantively testing the estimated future benefit of certain deferred tax assets was to review and test management's process. The issuer used forecasts to determine this estimate. The firm did not sufficiently evaluate the reasonableness of this estimate because the firm's procedures to test certain assumptions underlying these forecasts were limited to inquiring of management and performing a sensitivity analysis that indicated that if certain alternative assumptions were used the future benefit would change by a significant amount. Further the firm did not perform any procedures to test the accuracy and completeness of certain data the issuer used in these forecasts. (AS 1105.10; AS 2501.09 .10 and .11) Financial statement audit only | AS 1105.10; AS 2501.9; AS 2501.10; AS 2501.11 |
Issuer J3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Business Combinations | The firm selected for testing a control that included the issuer's review of the reasonableness of the revenue-growth assumptions used in the valuation of certain assets acquired and liabilities assumed. The firm did not evaluate the specific review procedures that the control owner performed to assess the reasonableness of the revenue-growth assumptions. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 2 | Business Combinations | The firm did not identify and evaluate the significance to the financial statements of omissions from a required disclosure under FASB ASC Topic 805 Business Combinations. (AS 2810.30 and .31) Both financial statement and ICFR audits | AS 2810.30; AS 2810.31 | |
| 3 | Revenue | During the audit the firm did not identify and evaluate the significance to the financial statements of misstatements in a required disclosure under FASB ASC Topic 280 Segment Reporting. (AS 2810.30 and .31) Both financial statement and ICFR audits | AS 2810.30; AS 2810.31 |
Issuer K1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Allowance for Credit/Loan Losses | The firm selected for testing a control that consisted of the issuer's review of the assigned loan risk ratings. The loan risk rating was an important input in estimating the ALL and determining whether a loan would be individually or collectively evaluated for impairment. The firm did not evaluate the review procedures that the control owner performed 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) ICFR audit only | AS 2201.42; AS 2201.44 |
Issuer L1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Business Combinations | The firm selected for testing a control over the review of the valuation of assets acquired and liabilities assumed in a business combination. The firm did not evaluate the specific review procedures that the control owner performed to assess the accuracy of the inventory information used to determine the valuation of the inventory acquired. (AS 2201.42 and .44) ICFR audit only | AS 2201.42; AS 2201.44 |
Issuer M1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Leases | During the audit the firm did not identify and evaluate the significance to the financial statements of misstatements related to lease expense information included in a required disclosure under FASB ASC Topic 842 Leases. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 |