- Inspection year
- 2021
- Report date
- 06-Oct-2022
- PCAOB release
- 104-2022-230
- Audits reviewed
- 2
- Audits w/ Part I.A deficiencies
- 2
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 14
- Part I.B deficiencies
- 2
- 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 A13 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer used an application to process revenue transactions and maintain related data. A service organization provided software and data center hosting services related to this application. The firm did not evaluate whether the service auditor's report provided sufficient evidence because the firm did not assess the scope of the examination and applications covered the controls tested the way in which tested controls relate to the issuer's controls and the results of those tests of controls. (AS 2201.B21) Both financial statement and ICFR audits | AS 2201.B21 | |
| 2 | Revenue | The issuer used an application to process revenue transactions and maintain related data. A service organization provided software and data center hosting services related to this application. The firm did not perform any procedures to ascertain whether there were any changes in the service organization's controls from the date of the service auditor's report to year end given the length of period under audit not covered by the service auditor's report. (AS 2201.39 .B24 and .B25) Both financial statement and ICFR audits | AS 2201.39; AS 2201.B24; AS 2201.B25 | |
| 3 | Revenue | The issuer used an application to process revenue transactions and maintain related data. A service organization provided software and data center hosting services related to this application. The application interfaced with a revenue recognition and reporting application. The firm selected for testing controls over change management for these applications. The firm did not evaluate whether users with access to develop program changes also had the ability to implement program changes. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 4 | Revenue | The issuer used an application to process revenue transactions and maintain related data. A service organization provided software and data center hosting services related to this application. The application interfaced with a revenue recognition and reporting application. The firm tested a control over the periodic review of access to these two applications at an interim date but did not perform any procedures to update the results of that testing from the interim date to year end. (AS 2201.55) Both financial statement and ICFR audits | AS 2201.55 | |
| 5 | Revenue | The firm did not perform sufficient substantive procedures to test or identify and test controls over the completeness of reports it used to make selections for testing these change management controls and certain other controls over logical access because it limited its procedures to observing the issuer generate the reports. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 6 | Revenue | The firm did not identify and test any controls over changes and privileged access to the database that supports these two applications. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 7 | Revenue | The firm tested information technology (IT) dependent manual controls that used reports generated by the two applications. The firm's approach to test the accuracy and completeness of these reports depended on effective IT general controls. In addition the firm tested certain automated application controls within the two applications as of a point in time. As a result of the above deficiencies the firm's testing of these controls was not sufficient. (AS 2201.46) Both financial statement and ICFR audits | AS 2201.46 | |
| 8 | Revenue | Certain of the issuer's contracts contained multiple performance obligations. The firm selected a sample of contracts for testing. The firm did not perform substantive procedures to evaluate the reasonableness of the allocation of the transaction price to the separate performance obligations for the contracts selected with multiple performance obligations. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 | |
| 9 | Revenue | Certain of the issuer's contracts contained multiple performance obligations. The firm selected a sample of contracts for testing. The firm did not perform sufficient procedures to test that performance obligations were satisfied for certain of the contracts because the firm limited its procedures to obtaining reports from the issuer. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 | |
| 10 | Significant Accounts | The issuer engaged an external specialist to determine the fair value of a significant account. The following deficiencies were identified: - The firm did not evaluate the relevance of certain data from sources external to the issuer that the company's specialist used to develop an assumption. (AS 1105.A8a) Both financial statement and ICFR audits | AS 1105.A8a | |
| 11 | Significant Accounts | The issuer engaged an external specialist to determine the fair value of a significant account. The following deficiencies were identified: - The firm did not evaluate the relevance and reliability of certain other data from sources external to the issuer that the company's specialist used to develop its assumptions. (AS 1105.A8a) Both financial statement and ICFR audits | AS 1105.A8a | |
| 12 | Significant Accounts | The issuer engaged an external specialist to determine the fair value of a significant account. The following deficiencies were identified: - The firm did not evaluate the reasonableness of certain significant assumptions developed by the company's specialist. (AS 1105.A8b) Both financial statement and ICFR audits | AS 1105.A8a | |
| 13 | Significant Accounts | The issuer engaged an external specialist to determine the fair value of a significant account. The following deficiencies were identified: - The firm did not perform sufficient procedures to evaluate certain significant assumptions developed by the issuer that the company's specialist used. Specifically beyond comparing assumptions for the current year to actual results the firm did not evaluate (1) whether the assumptions were consistent with historical and recent experience taking into account changes in conditions and events affecting the issuer and (2) the issuer's intent and ability to carry out the assumptions. (AS 2501.16 and .17) Both financial statement and ICFR audits | AS 2501.16; AS 2501.17 |
Issuer B1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm selected for testing a control that consisted of the issuer's review of revenue and was dependent on system information. The firm did not sufficiently evaluate the design of this control because the firm did not identify that the procedures that the control owner performed to ensure that the system information was accurate and complete were limited to reviewing the parameters that were applied to generate the system information. (AS 2201.42) ICFR audit only | AS 2201.42 |