- Inspection year
- 2021
- Report date
- 18-Aug-2022
- PCAOB release
- 104-2022-171
- Audits reviewed
- 1
- Audits w/ Part I.A deficiencies
- 1
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 8
- Part I.B deficiencies
- 1
- Report
- View PDF ↗
Deficiencies (8)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A8 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Significant Estimates | The firm's approach for substantively testing the estimate was to review and test management's process. The firm did not sufficiently evaluate the reasonableness of this estimate. Specifically the firm did not perform procedures to evaluate the relevance and reliability of certain external data the issuer used in determining its assumptions. (AS 1105.04 and .06; AS 2501.11) [The citations in this paragraph refer to AS 2501 Auditing Accounting Estimates which was in effect for this audit. This standard was replaced by AS 2501 Auditing Accounting Estimates Including Fair Value Measurements which became effective for audits of financial statements for fiscal years ending on or after December 15 2020.] Financial statement audit only | AS 1105.4; AS 1105.6; AS 2501.11 | |
| 2 | Significant Estimates | The firm's approach for substantively testing the estimate was to review and test management's process. The firm did not perform any substantive procedures to test or identify and test controls over the accuracy and completeness of internal data the issuer used in determining assumptions. (AS 1105.10; AS 2501.11) [The citations in this paragraph refer to AS 2501 Auditing Accounting Estimates which was in effect for this audit. This standard was replaced by AS 2501 Auditing Accounting Estimates Including Fair Value Measurements which became effective for audits of financial statements for fiscal years ending on or after December 15 2020.] Financial statement audit only | AS 1105.10; AS 2501.11 | |
| 3 | Significant Estimates | The firm's approach for substantively testing the estimate was to review and test management's process. The firm did not perform procedures to evaluate the reasonableness of certain assumptions used by the issuer to determine this estimate. (AS 2501.09 .10 and .11) [The citations in this paragraph refer to AS 2501 Auditing Accounting Estimates which was in effect for this audit. This standard was replaced by AS 2501 Auditing Accounting Estimates Including Fair Value Measurements which became effective for audits of financial statements for fiscal years ending on or after December 15 2020.] Financial statement audit only | AS 2501.9; AS 2501.10; AS 2501.11 | |
| 4 | Certain Liabilities | The firm's approach to testing certain liabilities included reliance on controls. The following deficiencies were identified: · The issuer used a service organization to process and record transactions related to these liabilities. The firm did not perform procedures to test beyond inquiring of management certain complimentary user controls over these liabilities identified in the service auditor's report. (AS 2601.14) Financial statement audit only | AS 2601.14 | |
| 5 | Certain Liabilities | The firm's approach to testing certain liabilities included reliance on controls. The following deficiencies were identified: · The firm did not test or in the alternative test any controls over the completeness of system-generated reports that it used to make its selections for testing controls over these liabilities. (AS 1105.10) Financial statement audit only | AS 1105.10 | |
| 6 | Certain Liabilities | The sample sizes the firm used in its substantive procedures to test these liabilities were too small to provide sufficient appropriate audit evidence because these procedures were designed based on a level of control reliance that was not supported due to the deficiencies in the firm's control testing discussed above. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A) Financial statement audit only | AS 2301.16; AS 2301.18; AS 2301.37; AS 2315.19; AS 2315.23; AS 2315.23A | |
| 7 | Certain Liabilities | The firm did not perform any substantive procedures to test or sufficiently test controls over the accuracy and completeness of certain reports that it used in its substantive testing of these liabilities. (AS 1105.10) Financial statement audit only | AS 1105.10 | |
| 8 | Journal Entries | The firm identified journal entries that met certain criteria and haphazardly selected certain of those journal entries for testing without having a basis for its selection. Further for all but one of the journal entries selected for testing the firm did not examine the underlying support for the journal entries and instead limited its procedures to inspecting reviewer signatures or inquiring of management. (AS 2401.61) Financial statement audit only | AS 2401.61 |