- Inspection year
- 2020
- Report date
- 26-May-2022
- PCAOB release
- 104-2022-142a
- Audits reviewed
- 3
- Audits w/ Part I.A deficiencies
- 2
- Part I.A deficiency rate
- 67%
- 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 A2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Financial Liability | During the prior year the issuer entered into a licensing arrangement in which the licensee purchased the issuer's common shares and warrants. The arrangement also included an option ('put option') that required the issuer to repurchase certain of the common shares under specific conditions for cash. The issuer did not record the put option. The firm did not identify and appropriately address a departure from International Financial Reporting Standards (IFRS) related to the issuer not recording the put option as a financial liability at the present value of the redemption amount in conformity with IAS 32 Financial Instruments: Presentation. (AS 2810.30) In connection with our review the issuer reevaluated the prior year and current year accounting for the arrangement 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 reports on the 2018 and 2019 financial statements. Financial statement audit only | AS 2810.30 | Incorrect opinion |
| 2 | Equity-Related Transactions | During the year the issuer sold preferred stock to related parties. The firm did not identify and evaluate the significance to the financial statements of the issuer's omission of required disclosures of these related party transactions in conformity with IAS 24 Related Party Disclosures. (AS 2410.17; AS 2810.30 and 31) Financial statement audit only | AS 2410.17; AS 2810.30; AS 2810.31 | Incorrect opinion |
Issuer B2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Journal Entries | The issuer's manual journal entry procedures allowed the control owner to prepare the journal entry and support and then review and post the journal entry after it is created in the system by a subordinate. The firm did not identify and test any controls to address the risk that an individual could prepare review and post a journal entry. (AS 2201.39) ICFR audit only | AS 2201.39 | |
| 2 | Leases | The firm did not identify and test any controls over right of use assets and lease obligations. (AS 2201.39) ICFR audit only | AS 2201.39 |