- Inspection year
- 2019
- Report date
- 30-Sep-2021
- PCAOB release
- 104-2021-188
- Audits reviewed
- 3
- Audits w/ Part I.A deficiencies
- 2
- Part I.A deficiency rate
- 67%
- Part I.A deficiencies
- 5
- Part I.B deficiencies
- 2
- Report
- View PDF ↗
Deficiencies (5)
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 | Investment Securities | The issuer engaged an external specialist to estimate the fair value of certain investment securities. The securities had a publicly available quoted price on the last business day prior to year end. The firm did not evaluate the difference between the estimated fair value of the securities determined by the external specialist and the publicly quoted price. (CAS3 500.11; CAS 540.15 and 18) Financial statement audit only | Other Non-PCAOB Standards | |
| 2 | Business Combinations | The issuer engaged an external specialist to determine the fair value of intangible assets acquired in a business combination. The firm did not sufficiently evaluate the financial projections used to value the acquired intangible assets because it limited its procedures to (1) inquiring of management (2) comparing projected sales prices to current sales prices without performing procedures to evaluate whether the current sales prices represented a reasonable expectation of future sales prices and (3) comparing the projected sales quantities to certain industry information without performing procedures to evaluate the relevance and reliability of that industry information. (CAS 500.07 and 08; CAS 540.15 and 18) Financial statement audit only | Other Non-PCAOB Standards |
Issuer B3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue and Related Accounts | For revenue from certain services the firm's testing of revenue consisted primarily of vouching cash receipts. The firm however did not evaluate whether revenue was appropriately recognized under FASB IFRS 15 Revenue from Contracts with Customers. (AS 2301.08; AS 2810.30) Financial statement audit only | AS 2301.8; AS 2810.30 | |
| 2 | Revenue and Related Accounts | The issuer had a contract dispute with a vendor who provided certain services to the issuer's customers on behalf of the issuer. The firm did not perform procedures to (1) understand and evaluate the nature of the dispute and (2) obtain evidence to support the issuer's conclusion on recognizing revenue based on its assessment that the vendor continued to provide the underlying service to the issuer's customers even though the issuer had stopped paying the vendor for such services due to the dispute. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 3 | Significant Estimates | 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 perform procedures to test the assumptions related to forecasts of future economic conditions used by the issuer to determine the estimate. Further the firm did not evaluate the issuer's omission of recent information from the assumptions beyond obtaining representation from management that the activity from that period was not representative of conditions at year end. (AS 2501.09 .10 and .11) Financial statement audit only | AS 2501.9; AS 2501.10; AS 2501.11 |