- Inspection year
- 2019
- Report date
- 09-Sep-2021
- PCAOB release
- 104-2021-168
- Audits reviewed
- 2
- Audits w/ Part I.A deficiencies
- 1
- Part I.A deficiency rate
- 50%
- Part I.A deficiencies
- 6
- Part I.B deficiencies
- —
- Report
- View PDF ↗
Deficiencies (6)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A6 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | With respect to the revenue transaction cycle the firm did not perform sufficient procedures to (1) obtain the necessary understanding of the flow of transactions including the effect of the issuer's information technology ('IT') systems to identify the likely sources of potential misstatements and (2) obtain a sufficient understanding of the likely sources of potential misstatements to identify and test controls that addressed the risks of misstatement for the relevant revenue assertions. (AS 2201.30 and .39) Both financial statement and ICFR audits | AS 2201.30; AS 2201.39 | |
| 2 | Revenue | The firm tested IT general controls and identified a control deficiency for a change management control related to developers having direct access to implement changes. The firm concluded it was a significant deficiency based on the firm's testing of a compensating control that consisted of management's review of change requests. The firm did not sufficiently evaluate the severity of the control deficiency because it did not identify that the compensating control did not address the risk related to unauthorized changes being made directly in the system. (AS 2201.68) Both financial statement and ICFR audits | AS 2201.68 | |
| 3 | Revenue | The firm selected for testing a control that consisted of management's review of an annual analysis of the revenue recognized by the issuer using revenue data shipment dates and delivery dates (collectively 'data'). The firm did not evaluate the 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) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 4 | Revenue | The firm selected for testing a control that consisted of management's review of an annual analysis of the revenue recognized by the issuer using revenue data shipment dates and delivery dates (collectively 'data'). The firm did not identify and test controls over the accuracy and completeness of data used in the operation of this control. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 5 | Revenue | The firm used the issuer's annual analysis in its substantive procedures. The firm did not test or test controls over the accuracy and completeness of revenue data and the accuracy of delivery dates. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 6 | Revenue | The firm used the issuer's annual analysis in its substantive procedures. The firm did not sufficiently test or test controls over the accuracy of the shipment dates because it limited its selection of sample items to the last seven days of the year under audit and therefore was not representative of the population. (AS 2315.24) Both financial statement and ICFR audits | AS 2315.24 |