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Deloitte & Touche LLP
United States · Deloitte Touche Tohmatsu Limited · Annually Inspected
- Inspection year
- 2021
- Report date
- 04-Nov-2022
- PCAOB release
- 104-2022-219a
- Audits reviewed
- 54
- Audits w/ Part I.A deficiencies
- 7
- Part I.A deficiency rate
- 13%
- Part I.A deficiencies
- 10
- Part I.B deficiencies
- 5
- Report
- View PDF ↗
Deficiencies (10)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Inventory | With respect to work-in-process inventory at one of the issuer's business units which the firm designated as subject to more extensive audit procedures the following deficiencies were identified: • The firm did not identify and test any controls over this inventory. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 2 | Inventory | With respect to work-in-process inventory at one of the issuer's business units which the firm designated as subject to more extensive audit procedures the following deficiencies were identified: • The firm did not perform any substantive procedures to test this inventory. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 | |
| 3 | Inventory | The firm designated certain of the issuer's other business units as subject to less extensive audit procedures. With respect to these business units the firm selected for testing a control that included quarterly reviews of financial information including inventory. The firm did not evaluate the specific review procedures that the control owners performed to determine whether items identified for follow up were appropriately resolved. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 |
Issuer B2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Inventory | The issuer performed cycle counts of certain inventory held at various locations. The firm selected for testing a control that consisted of the issuer's reviews of the cycle-count results. The firm did not evaluate the review procedures that the control owners performed including the procedures to identify items for follow up and the procedures to determine whether those items were appropriately resolved. (AS 2201.42 and .44) ICFR audit only | AS 2201.42; AS 2201.44 | |
| 2 | Inventory | The issuer performed cycle counts of certain inventory held at various locations. The firm selected for testing a control that consisted of the issuer's reviews of the cycle-count results. The firm did not identify and test any controls over the accuracy and completeness of the reports that the control owners used in the operation of this control. (AS 2201.39) ICFR audit only | AS 2201.39 |
Issuer C1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Allowance for Credit/Loan Losses | The firm selected for testing controls that consisted of the issuer's validation of the models that the issuer used to estimate the quantitative component of the ACL for loans collectively evaluated for impairment. As part of the review to validate these models the control owners performed various tests of (1) the models such as sensitivity analyses and benchmark comparisons to other models and (2) the data used to develop the models and any underlying assumptions. The firm did not evaluate the specific review procedures that the control owners performed to (1) conduct and evaluate the results of these tests and (2) verify the accuracy and completeness of the data the control owners used in these tests. (AS 2201.42 and .44) ICFR audit only | AS 2201.42; AS 2201.44 |
Issuer D1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Warrants | During the audit the firm did not identify and appropriately address that the issuer's accounting for warrants as equity was not in conformity with FASB ASC Topic 815 Derivatives and Hedging. (AS 2810.30) Unrelated to our review the issuer reevaluated its accounting for these warrants 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 report on the financial statements. Financial statement audit only | AS 2810.30 |
Issuer E1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Derivatives | The issuer used models to value certain derivatives. The firm selected for testing a control that consisted of the issuer's review of the fair values determined by these models. The firm did not evaluate the specific review procedures the control owner performed to assess the reasonableness of the resulting fair values for certain of these derivatives. (AS 2201.42 and .44) ICFR audit only | AS 2201.42; AS 2201.44 |
Issuer F1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer generated certain revenue from the sale of electricity. The firm selected for testing a control over the volumes of electricity delivered that consisted of the issuer's comparison of adjusted monthly volumes to the corresponding prior-period adjusted volumes. The firm did not test the aspect of this control that addressed the accuracy and completeness of the information the issuer used to calculate the adjustments to the volumes delivered. (AS 2201.42 and .44) ICFR audit only | AS 2201.42; AS 2201.44 |
Issuer G1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Going Concern | In evaluating whether there was substantial doubt about the issuer's ability to continue as a going concern the firm did not sufficiently test the reliability of the issuer's forecasted cash outflows that the firm used in its evaluation. The firm compared the forecasted cash outflows to the issuer's current-year cash outflows adjusted for certain one-time charges but did not perform any procedures to evaluate whether those adjusted current-year cash outflows would be representative of future cash outflows. Further the firm also considered in its evaluation the amount of credit that the issuer expected to have available but did not perform any procedures to evaluate whether this expected amount was reasonable. (AS 1105.04 and .06; AS 2415.03) Financial statement audit only | AS 1105.4; AS 1105.6; AS 2415.3 |