- Inspection year
- 2020
- Report date
- 13-May-2022
- PCAOB release
- 104-2022-140
- Audits reviewed
- 3
- Audits w/ Part I.A deficiencies
- 3
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 14
- Part I.B deficiencies
- 7
- 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 A5 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm did not perform procedures to test whether certain revenue recognition criteria had been met including whether delivery had occurred and collectability was reasonably assured. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 2 | Inventory | The issuer performed physical inventory counts and cycle counts and the firm was not present at the counts. The firm did not make or observe some physical counts of inventory and apply appropriate tests of intervening transactions. Further the firm did not inspect the records of the issuer's counts and perform procedures relating to the physical inventory on which the balance-sheet inventory was based. (AS 2510.12) Financial statement audit only | AS 2510.12 | |
| 3 | Inventory | The issuer performed physical inventory counts and cycle counts and the firm was not present at the counts. The firm did not evaluate whether certain inventory was recorded at the lower of cost or market. (AS 2501.07) Financial statement audit only | AS 2501.7 | |
| 4 | Cash | The firm assessed inherent risk of cash as high and sent confirmation requests. The firm did not receive replies to its confirmation requests. The firm did not sufficiently test the existence of cash because its alternative procedures were limited to tracing the reported cash balance to copies of the bank statements obtained from the issuer without verifying the validity of the bank statement. (AS 2310.31) Financial statement audit only | AS 2310.31 | |
| 5 | Journal Entries | The firm did not perform any procedures to identify and select journal entries and other adjustments for testing. (AS 2401.58) Financial statement audit only | AS 2401.58 |
Issuer B7 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm did not identify and evaluate the significance to the financial statements of a departure from GAAP related to the issuer not adopting FASB ASC 606 Revenue from Contracts with Customers and the omission of the required disclosures. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 | |
| 2 | Revenue | The firm did not evaluate whether the issuer was acting as either a principal or agent for each good or service in the contract and was appropriately recognizing revenue on either a gross or net basis. (AS 2810.30) Financial statement audit only | AS 2810.30 | |
| 3 | Certain Assets and Liabilities | The firm did not test the existence of an asset and completeness of a liability. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 4 | Certain Assets and Liabilities | The firm did not test the fair value of this liability. (AS 2502.15) Financial statement audit only | AS 2502.15 | |
| 5 | Cash | Certain of the cash reported by the issuer was held in an account in the name of the issuer's chief executive officer. The firm did not perform procedures to test this cash beyond inquiring of management and reviewing issuer documentation. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 6 | Cash | The firm did not identify and evaluate the significance to the financial statements of a departure from GAAP related to the issuer's omission of disclosures that this cash was held by a related party and the terms and manner of settlement in conformity with FASB ASC Topic 850 Related Party Disclosures. (AS 2410.17; AS 2810.30 and .31) Financial statement audit only | AS 2410.17; AS 2810.30; AS 2810.31 | |
| 7 | Cash | The firm did not evaluate whether the presentation of cash held by a related party within cash and cash equivalents was in conformity with GAAP. (AS 2810.30) Financial statement audit only | AS 2810.30 |
Issuer C2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Significant Transactions | For certain significant transactions the firm did not sufficiently evaluate whether an assumption used to value these transactions represented its fair value because it did not consider certain contrary evidence. (AS 2502.26 .28 .31 and .36) Financial statement audit only | AS 2502.26; AS 2502.28; AS 2502.31; AS 2502.36 | |
| 2 | Significant Transactions | For certain significant transactions the firm did not evaluate whether these transactions were recorded in the appropriate period and at the appropriate amount in conformity with GAAP. (AS 2810.30) Financial statement audit only | AS 2810.30 |