- Inspection year
- 2020
- Report date
- 13-May-2022
- PCAOB release
- 104-2022-138
- Audits reviewed
- 4
- Audits w/ Part I.A deficiencies
- 4
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 13
- Part I.B deficiencies
- 4
- Report
- View PDF ↗
Deficiencies (13)
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 recognized certain revenue from product sales to customers. For certain customers the firm did not evaluate if it was probable that the issuer would collect substantially all of the consideration to which it believes it is entitled in order to recognize revenue in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers. Further the firm did not evaluate whether the timing of customer payments indicated the existence of implicit payment terms that would affect the recognition of revenue in conformity with FASB ASC Topic 606. (AS 2810.30) Financial statement audit only | AS 2810.30 | |
| 2 | Accounts Receivable | The firm selected for confirmation a customer's accounts receivable balance and received an electronic response to its confirmation request. The firm did not consider performing procedures to address the risk associated with electronic responses. (AS 2310.29) Financial statement audit only | AS 2310.29 | |
| 3 | Goodwill and Intangible Assets | The issuer engaged an external specialist to determine the fair value of a reporting unit and recorded impairment losses related to intangible assets and goodwill based on that fair value. The firm did not evaluate revenue projections developed by the issuer and used by the external specialist to determine the fair value of the reporting unit. Further the firm did not evaluate contradictory evidence related to these projections. (AS 1210.12; AS 2810.03) Financial statement audit only | AS 1210.12; AS 2810.3 | |
| 4 | Goodwill and Intangible Assets | The issuer engaged an external specialist to determine the fair value of a reporting unit and recorded impairment losses related to intangible assets and goodwill based on that fair value. The firm did not identify and appropriately address the issuer's omission of certain disclosures required by FASB ASC Topic 350 Intangibles — Goodwill and Other and an inaccurate disclosure. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 |
Issuer B5 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Inventory | The firm did not evaluate whether the issuer consistently applied its basis for stating inventories in conformity with FASB ASC Topic 330 Inventory. (AS 2810.30) Financial statement audit only | AS 2810.30 | |
| 2 | Inventory | The firm did not identify and appropriately address a departure from GAAP related to the issuer's omission of a disclosure required by FASB ASC Topic 330. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 | |
| 3 | Inventory | The issuer's year-end inventory included work-in-progress and finished goods. The firm did not obtain an understanding of and test the method the issuer used to allocate inventory costs to work-in-progress and finished goods. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 4 | Inventory | The issuer's year-end inventory included work-in-progress and finished goods. The firm did not test the accuracy and completeness of issuer information the firm used to test inventory costs. (AS 1105.10) Financial statement audit only | AS 1105.10 | |
| 5 | Inventory | The firm did not perform sufficient procedures to test the issuer's impairment analysis of inventory because it limited its procedures to obtaining the issuer's impairment analysis and concluding the result of the analysis was consistent with historical margins. (AS 2501.07) Financial statement audit only | AS 2501.7 |
Issuer C3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer recognizes revenues from product sales. The firm did not test whether the issuer had evaluated if the issuer and customers had approved the contracts and were committed to perform their respective obligations in conformity with FASB ASC Topic 606. (AS 2810.30) Financial statement audit only | AS 2810.30 | |
| 2 | Revenue | The issuer recognizes revenues from product sales. The firm did not evaluate whether the issuer satisfied its performance obligations. (AS 2810.30) Financial statement audit only | AS 2810.30 | |
| 3 | Long-Lived Assets | The issuer performed a qualitative assessment of certain long-lived assets for impairment. The firm did not sufficiently evaluate whether the issuer considered certain relevant events or changes in circumstances in conformity with FASB ASC Topic 360 Property Plant and Equipment including certain of the issuer's disclosures in the financial statements that indicated that the carrying value of the long-lived assets may not have been recoverable. (AS 2810.03 and .30) Financial statement audit only | AS 2810.3; AS 2810.30 |
Issuer D1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Cash and Cash Equivalents | The issuer reported cash and cash equivalents at year end that included cash held by a law firm in an escrow account. The firm did not perform any procedures to determine if cash held by the law firm was restricted when evaluating the presentation and disclosure of the escrowed cash in conformity with FASB ASC Topic 210 Balance Sheet. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 |