- Inspection year
- 2021
- Report date
- 06-Oct-2022
- PCAOB release
- 104-2022-239
- Audits reviewed
- 6
- Audits w/ Part I.A deficiencies
- 1
- Part I.A deficiency rate
- 17%
- Part I.A deficiencies
- 7
- Part I.B deficiencies
- 1
- Report
- View PDF ↗
Deficiencies (7)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A7 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Business Combinations | During the year the issuer acquired a business entity. The firm selected for testing a control over the review of valuation of the assets acquired and liabilities assumed in the business combination. The firm did not evaluate the review procedures that the control owner 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) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 2 | Business Combinations | During the year the issuer acquired a business entity. The firm did not perform any substantive procedures beyond inquiry to evaluate the reasonableness of certain assumptions used to determine the fair value of an acquired intangible asset. (AS 2502.26 and .28) Both financial statement and ICFR audits | AS 2502.26; AS 2502.28 | |
| 3 | Business Combinations | During the year the issuer acquired a business entity. The firm did not perform sufficient procedures to evaluate the useful life of this intangible asset because it limited its procedures to inquiry and tracing the useful life to the issuer's amortization policy. (AS 2501.09 .10 and .11) [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 | |
| 4 | Revenue | The firm selected revenue transactions for substantive testing. For certain transactions the firm did not perform any substantive procedures to evaluate whether the performance obligation had been satisfied before revenue was recognized. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 | |
| 5 | Accounts Receivable | The firm did not perform substantive procedures to test or in the alternative identify and test controls over the accuracy and completeness of certain data and reports used in its substantive procedures to test revenue deferred revenue and accounts receivable. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 6 | Deferred Revenue | The sample sizes the firm used in its substantive procedures to test revenue and deferred revenue were too small to provide sufficient appropriate audit evidence because it used a proprietary accept/reject methodology that did not consider factors relevant to determining sample size for substantive testing. (AS 2301.37 and .42; AS 2315.16 .19 .23 and .23A) Both financial statement and ICFR audits | AS 2301.37; AS 2301.42; AS 2315.16; AS 2315.19; AS 2315.23; AS 2315.23A | |
| 7 | Deferred Revenue | The firm used a proprietary accept/reject methodology for substantive testing. With respect to deferred revenue the firm identified misstatements but did not reject the test and perform other audit procedures. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 |