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PricewaterhouseCoopers LLP
United States · PricewaterhouseCoopers International Limited · Annually Inspected
- Inspection year
- 2021
- Report date
- 04-Nov-2022
- PCAOB release
- 104-2022-223
- Audits reviewed
- 56
- Audits w/ Part I.A deficiencies
- 2
- Part I.A deficiency rate
- 4%
- Part I.A deficiencies
- 4
- Part I.B deficiencies
- 3
- 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 | Oil and Gas Properties | The issuer used an external specialist to evaluate the issuer's oil and gas reserves that were used in the valuation of properties for which oil and gas reserves had been assigned (“proved properties”). The firm selected for testing a control that consisted of the issuer's review of the data and assumptions used in its estimate of its oil and gas reserves for proved properties. The firm did not evaluate the specific review procedures that the control owner performed to assess the reasonableness of certain assumptions. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 2 | Oil and Gas Properties | The issuer concluded that certain of its properties that had no assigned oil and gas reserves (“unproved properties”) were not impaired primarily based on management's intent to drill on these properties. The firm concluded that the issuer's assessment was reasonable but did not evaluate certain information including the issuer's disclosure related to substantial doubt about its ability to continue as a going concern and changes in management's plans with respect to certain other unproved or proved undeveloped properties that indicated the issuer may not have the ability or intent to carry out its plans. (AS 2501.09 .10 and .11; AS 2810.03) [This citation refers 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.] Both financial statement and ICFR audits | AS 2501.9; AS 2501.10; AS 2501.11; AS 2810.3 |
Issuer B2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Warrants | During the audit the firm did not identify and appropriately address that the issuer's accounting for certain 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. The issuer also reevaluated its controls over the accounting for these warrants and concluded that a material weakness existed that had not been previously identified. The issuer subsequently reflected this material weakness in a revision to its report on ICFR and the firm revised its opinion on the effectiveness of the issuer's ICFR to express an adverse opinion and reissued its report. Financial statement audit only | AS 2810.30 | |
| 2 | Business Combinations | During the year the issuer acquired a business. The firm did not identify and appropriately address that the issuer's inclusion of certain equity awards as part of the accounting for this business combination was not in conformity with FASB ASC Topic 718 Stock Compensation and FASB ASC Topic 805 Business Combinations. (AS 2810.30) Unrelated to our review the issuer reevaluated its accounting for this business combination 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. The issuer also reevaluated its controls over the accounting for this business combination and concluded that a material weakness existed that had not been previously identified. The issuer subsequently reflected this material weakness in a revision to its report on ICFR and the firm revised and reissued its report to include an additional material weakness. Financial statement audit only | AS 2810.30 |