- Inspection year
- 2019
- Report date
- 21-Sep-2021
- PCAOB release
- 104-2021-178a
- 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
- 3
- 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 A4 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer generated two types of revenue ('Revenue A' and 'Revenue B'). The following deficiencies were identified: · The firm did not perform any procedures to test Revenue A. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 2 | Revenue | The issuer generated two types of revenue ('Revenue A' and 'Revenue B'). The following deficiencies were identified: · In selecting its sample of items to test Revenue B the firm did not determine whether it was appropriate to select items from accounts receivable activity reports that may not have included a complete population of revenue transactions for the year. Further in determining the sample size the firm did not take into account the relevant factors including tolerable misstatement for the population the allowable risk of incorrect acceptance and the characteristics of the population. (AS 2315.16 .23 .23A and .24) Financial statement audit only | AS 2315.16; AS 2315.23; AS 2315.24; AS 2315.23A | |
| 3 | Revenue | The issuer generated two types of revenue ('Revenue A' and 'Revenue B'). The following deficiencies were identified: · The firm did not perform any procedures to evaluate the appropriateness of the issuer's financial statement presentation of revenue on a gross versus net basis. (AS 2810.30) Financial statement audit only | AS 2810.30 | |
| 4 | Related Party Liabilities | Certain of the issuer's recorded liabilities were due to a related party or entities controlled by that related party. The firm did not perform any procedures to test liabilities due to the related party or entities controlled by the related party. Further the firm did not test beyond comparing certain of these amounts to the general ledger the disclosures related to these related party transactions. (AS 2410.11 and .17; AS 2810.30 and .31) Financial statement audit only | AS 2410.11; AS 2410.17; AS 2810.30; AS 2810.31 |
Issuer B2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Derivatives | The issuer recorded a derivative liability and determined the fair value of the derivative liability using an option pricing model. The firm did not consider the variability of a certain provision and the issuer's ability to settle the transactions in evaluating whether the use of this model was appropriate and consistent with GAAP and related SEC guidance. (AS 2502.18) Financial statement audit only | AS 2502.18 | |
| 2 | Derivatives | The firm did not determine whether certain other instruments should have been accounted for as paid-in capital in conformity with FASB ASC Subtopic 470-20 Debt with Conversion and Other Options. (AS 2810.30) Financial statement audit only | AS 2810.30 |
Issuer C2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Share-Based Compensation | The issuer issued common stock for services and recognized stock-based compensation. The firm did not evaluate the reasonableness of a discount the issuer applied to the market price when valuing certain stock-based compensation. (AS 2502.26 and .28) Financial statement audit only | AS 2502.26; AS 2502.28 | |
| 2 | Share-Based Compensation | The issuer issued common stock for services and recognized stock-based compensation. The firm did not perform sufficient procedures to test the valuation of certain other stock-based compensation because it limited its procedures to comparing the issuer's valuation to another public filing. (AS 2502.26 and .28) Financial statement audit only | AS 2502.26; AS 2502.28 |