- Inspection year
- 2021
- Report date
- 06-Oct-2022
- PCAOB release
- 104-2022-240
- Audits reviewed
- 1
- Audits w/ Part I.A deficiencies
- 1
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 12
- Part I.B deficiencies
- 1
- Report
- View PDF ↗
Deficiencies (12)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A12 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Inventory | The issuer used multiple information technology (IT) applications to initiate process and record transactions related to revenue and related accounts and inventory. The firm selected for testing certain automated and IT-dependent manual controls that used data and reports generated or maintained by certain of these applications. The accuracy and completeness of these data and reports depended on effective IT general controls (ITGCs). As a result of the following deficiencies in the firm's testing of ITGCs the firm's testing of these automated and IT-dependent manual controls was not sufficient. (AS 2201.46) Both financial statement and ICFR audits | AS 2201.46 | |
| 2 | Inventory | The issuer used multiple information technology (IT) applications to initiate process and record transactions related to revenue and related accounts and inventory. The firm selected for testing certain automated and IT-dependent manual controls that used data and reports generated or maintained by certain of these applications. The accuracy and completeness of these data and reports depended on effective IT general controls (ITGCs). - The firm did not sufficiently test change management controls because the firm did not consider all program changes in making its selections for testing. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 3 | Inventory | The issuer used multiple information technology (IT) applications to initiate process and record transactions related to revenue and related accounts and inventory. The firm selected for testing certain automated and IT-dependent manual controls that used data and reports generated or maintained by certain of these applications. The accuracy and completeness of these data and reports depended on effective IT general controls (ITGCs). - The firm did not sufficiently test privileged access controls because the firm did not (1) consider all privileged access users in making its selections for testing and (2) test the procedures that control owners performed to evaluate the appropriateness of access. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 4 | Inventory | The issuer used multiple information technology (IT) applications to initiate process and record transactions related to revenue and related accounts and inventory. The firm selected for testing certain automated and IT-dependent manual controls that used data and reports generated or maintained by certain of these applications. The accuracy and completeness of these data and reports depended on effective IT general controls (ITGCs). - The firm did not sufficiently test the periodic user account review control because the firm did not sufficiently evaluate whether the control as designed could effectively prevent or detect a material misstatement because the firm did not consider whether every user was assigned to an approver or the appropriateness of permissions granted to roles. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 5 | Inventory | The issuer used multiple information technology (IT) applications to initiate process and record transactions related to revenue and related accounts and inventory. The firm selected for testing certain automated and IT-dependent manual controls that used data and reports generated or maintained by certain of these applications. The accuracy and completeness of these data and reports depended on effective IT general controls (ITGCs). - The engagement team did not identify and test any controls over the accuracy and completeness of user access lists used in the operation of the control including whether all users were included and all access roles for each user were listed for review. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 6 | Revenue and Related Accounts | With respect to Revenue and Related Accounts the firm selected for testing certain automated application controls related to revenue. The firm's testing of these controls was not sufficient because the procedures performed were substantive in nature and did not directly test the controls. (AS 2201.42 .44 and .B9) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44; AS 2201.B9 | |
| 7 | Revenue and Related Accounts | With respect to Revenue and Related Accounts the firm selected for testing two controls that consisted of reviews of contracts and analyses for appropriate accounting treatment under FASB ASC Topic 606 Revenue from Contracts with Customers. The firm did not evaluate the specific review procedures performed by the control owners to ensure appropriate evaluation of revenue recognition criteria. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 8 | Revenue and Related Accounts | With respect to Revenue and Related Accounts the firm selected for testing two controls that consisted of reviews of contracts and analyses for appropriate accounting treatment under FASB ASC Topic 606 Revenue from Contracts with Customers. The engagement team did not identify and test any controls over the completeness of the population of new and amended contracts used in the operation of one of the controls. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 9 | Revenue and Related Accounts | With respect to Revenue and Related Accounts to test certain revenue the firm selected sales transactions for testing. The firm did not perform sufficient procedures to test this revenue because its procedures were limited to (1) verifying that contracts were approved and (2) reading the issuer's technical accounting memorandums regarding the implementation of ASC Topic 606 for certain contracts that were entered into in years prior to the year under audit. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 | |
| 10 | Revenue and Related Accounts | With respect to Revenue and Related Accounts to test certain revenue the firm selected sales transactions for testing. The number of transactions the firm used in its substantive procedures to test revenue was 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 | |
| 11 | Inventory | The firm selected for testing certain automated application controls related to inventory. The firm's testing of these controls was not sufficient because the procedures performed were substantive in nature and did not directly test the controls. (AS 2201.42 .44 and .B9) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44; AS 2201.B9 | |
| 12 | Inventory | The firm observed for a sample of locations physical inventory counts performed as of various interim dates. The firm did not perform sufficient procedures to extend its audit conclusions on the existence of inventory for the periods between its interim testing and year end because the firm limited its procedures to agreeing inventory movements between the interim dates and year end to system-generated reports. (AS 2301.45) Both financial statement and ICFR audits | AS 2301.45; AS 2510.12 |