- Inspection year
- 2020
- Report date
- 13-May-2022
- PCAOB release
- 104-2022-139a
- Audits reviewed
- 1
- Audits w/ Part I.A deficiencies
- 1
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 4
- Part I.B deficiencies
- 2
- Report
- View PDF ↗
Deficiencies (4)
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 firm did not sufficiently evaluate whether the issuer recognized revenue in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers because it limited its procedures to verifying that the issuer received cash or that cash received agreed to a sales contract. (AS 2810.30) Financial statement audit only | AS 2810.30 | |
| 2 | Convertible Notes Payable | The firm did not evaluate the issuer's equity classification of and accounting for warrants issued with certain convertible notes payable including whether the warrants should have been classified and accounted for as (i) derivative liabilities in conformity with FASB ASC Topic 815 Derivatives and Hedging or (ii) liabilities in conformity with FASB ASC Topic 480 Distinguishing Liabilities from Equity. (AS 2810.30) Financial statement audit only | AS 2810.30 | |
| 3 | Convertible Notes Payable | In addition the firm did not evaluate the issuer's classification of and accounting for embedded conversion options within certain convertible notes payable including whether the conversion options should have been classified and accounted for as (i) derivatives and recorded at fair value in conformity with FASB ASC Subtopic 815-15 Derivatives and Hedging— Embedded Derivatives or (ii) beneficial conversion features and recorded at intrinsic value in conformity with FASB ASC Subtopic 470-20 Debt —Debt with Conversion and Other Options. (AS 2810.30) Financial statement audit only | AS 2810.30 | |
| 4 | Journal Entries | The firm scanned the general ledger but did not identify and test any journal entries and other adjustments. (AS 2401.58) Financial statement audit only | AS 2401.58 |