- Inspection year
- 2020
- Report date
- 21-Apr-2022
- PCAOB release
- 104-2022-120
- Audits reviewed
- 6
- Audits w/ Part I.A deficiencies
- 2
- Part I.A deficiency rate
- 33%
- Part I.A deficiencies
- 3
- Part I.B deficiencies
- 2
- Report
- View PDF ↗
Deficiencies (3)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer entered into arrangements with its customers for cooperative promotion allowances that the issuer recorded as an operating expense. The firm did not evaluate whether recording these allowances as an operating expense was appropriate because it did not perform procedures beyond inquiry to evaluate whether these allowances were a distinct good or service in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2810.30) In connection with our review the issuer reevaluated its accounting for cooperative promotion allowances and concluded that a material misstatement existed that had not been previously identified. The issuer subsequently corrected this misstatement in a restatement of its financial statements and the firm revised and reissued its report on the financial statements. Financial statement audit only | AS 2810.30 | Incorrect opinion |
Issuer B2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Business Combinations | During the year the issuer acquired certain businesses and engaged an external specialist to estimate the fair value of certain acquired assets. The issuer provided the external specialist prospective financial information and data that was used to determine the fair value of the assets. The firm's approach for testing the fair value of these assets was to review and test management's process. The firm did not perform any procedures to evaluate the reasonableness of the prospective financial information. (AS 1210.12) Financial statement audit only | AS 1210.12 | |
| 2 | Business Combinations | During the year the issuer acquired certain businesses and engaged an external specialist to estimate the fair value of certain acquired assets. The issuer provided the external specialist prospective financial information and data that was used to determine the fair value of the assets. The firm's approach for testing the fair value of these assets was to review and test management's process. The firm did not test the accuracy and/or completeness of the issuer-provided data. (AS 1210.12) Financial statement audit only | AS 1210.12 |