- Inspection year
- 2020
- Report date
- 10-Mar-2022
- PCAOB release
- 104-2022-087
- Audits reviewed
- 7
- Audits w/ Part I.A deficiencies
- 4
- Part I.A deficiency rate
- 57%
- Part I.A deficiencies
- 14
- Part I.B deficiencies
- 2
- Report
- View PDF ↗
Deficiencies (14)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A9 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer uses applications to process and record revenue transactions. The firm selected for testing controls over user access to these applications. The firm did not evaluate the specific review procedures that the control owners performed to verify the appropriateness of user access to certain of these applications. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 2 | Revenue | The issuer uses applications to process and record revenue transactions. The firm selected for testing controls over change management. The firm did not test these controls for certain applications beyond inquiry of management. (AS 2201.42 .44 and .50) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44; AS 2201.50 | |
| 3 | Revenue | The firm tested information technology ('IT') dependent manual controls that used reports generated by certain of these applications. The firm's approach to test the accuracy and completeness of these reports depended on effective IT general controls. As a result of the above deficiencies 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 | |
| 4 | Revenue | The firm selected for testing a control that consisted of the issuer's review of certain revenue compared to expectations. In evaluating the design of this control the firm did not assess the effect of a change in how the expectations were developed on the control's ability to effectively prevent or detect a misstatement. (AS 2201.42) Both financial statement and ICFR audits | AS 2201.42 | |
| 5 | Revenue | For certain revenue the firm did not identify and test any controls that addressed the risk of whether revenue was recorded based on purchase orders. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 6 | Revenue | The firm did not identify and test any controls over the accuracy and completeness of information used by the issuer in the operation of certain controls. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 7 | Revenue | The firm did not perform any substantive procedures to test or in the alternative test any controls over the accuracy and completeness of information used in the firm's testing of certain controls. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 8 | Inventory | The firm's approach for substantively testing the issuer's reserve for certain inventory was to develop an independent expectation based on an inventory aging. The firm did not perform any substantive procedures to test or in the alternative test any controls over the accuracy and completeness of the inventory aging. (AS 1105.10; AS 2501.09 .10 and .12) Both financial statement and ICFR audits | AS 1105.10; AS 2501.9; AS 2501.10; AS 2501.12 | |
| 9 | Inventory | The firm's approach for substantively testing the issuer's reserve for certain inventory was to develop an independent expectation based on an inventory aging. The firm did not perform any substantive procedures to test the reasonableness of the reserve for certain other inventory. (AS 2501.07) Both financial statement and ICFR audits | AS 2501.7 |
Issuer B2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | In testing certain revenue the firm did not evaluate the terms of the services between the issuer and its customers. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 2 | Accounts Receivable | The firm did not perform any substantive procedures to test the reasonableness of the reserve for accounts receivable. (AS 2501.07) Financial statement audit only | AS 2501.7 |
Issuer C2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Inventory | The firm used issuer inventory costing data in its substantive procedures to test the valuation of inventory. The firm did not perform any substantive procedures to test or in the alternative test any controls over the accuracy and completeness of this data. (AS 1105.10) Financial statement audit only | AS 1105.10 | |
| 2 | Inventory | The firm used issuer inventory costing data in its substantive procedures to test the valuation of inventory. The firm did not evaluate the reasonableness of the method the issuer used to allocate inventory-related costs to certain inventory. (AS 2501.07) Financial statement audit only | AS 2501.7 |
Issuer D1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm did not perform any substantive procedures to test or in the alternative test any controls over the accuracy and completeness of certain data it used to test certain revenue. (AS 1105.10) Financial statement audit only | AS 1105.10 |