- Inspection year
- 2021
- Report date
- 06-Oct-2022
- PCAOB release
- 104-2022-238
- Audits reviewed
- 2
- Audits w/ Part I.A deficiencies
- 1
- Part I.A deficiency rate
- 50%
- Part I.A deficiencies
- 5
- Part I.B deficiencies
- 2
- Report
- View PDF ↗
Deficiencies (5)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A5 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer recognized revenue on a straight-line basis over an estimated performance period. The firm did not sufficiently evaluate the appropriateness of recognizing revenue on a straight-line basis because it did not evaluate whether the issuer's efforts or expected inputs were expended evenly throughout the estimated performance period. (AS 2301.08) In connection with our review the issuer reevaluated its accounting for revenue 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 2301.8 | Incorrect opinion |
| 2 | Revenue | The issuer recognized revenue on a straight-line basis over an estimated performance period. The firm did not evaluate the reasonableness of the estimated performance period. (AS 2301.08) In connection with our review the issuer reevaluated its accounting for revenue 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 2301.8 | Incorrect opinion |
| 3 | Capitalized Software | The issuer incurred costs related to software development and capitalized certain of these costs using a percentage. The firm did not evaluate the reasonableness of this percentage. (AS 2501.07) [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.] Financial statement audit only | AS 2501.7 | Incorrect opinion |
| 4 | Capitalized Software | The issuer incurred costs related to software development and capitalized certain of these costs using a percentage. The firm did not evaluate whether certain software costs met the criteria for capitalization. (AS 2301.08) Financial statement audit only | AS 2301.8 | Incorrect opinion |
| 5 | Capitalized Software | The firm did not evaluate whether the issuer considered certain events or changes in circumstances including the issuer's operating losses negative cash flows negative working capital and substantial doubt about the issuer's ability to continue as a going concern in determining that the carrying value of the capitalized software was recoverable. (AS 2301.08) Financial statement audit only | AS 2301.8 | Incorrect opinion |