- Inspection year
- 2021
- Report date
- 20-Oct-2022
- PCAOB release
- 104-2022-247a
- Audits reviewed
- 1
- Audits w/ Part I.A deficiencies
- 1
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 6
- Part I.B deficiencies
- 5
- Report
- View PDF ↗
Deficiencies (6)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A6 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Goodwill and Intangible Assets | To test goodwill for potential impairment the issuer compared the estimated fair value of the related reporting unit to the carrying value of the reporting unit and determined that no impairment existed. For finite-lived intangible assets the issuer determined that the recoverable amounts were the same as the carrying amounts and therefore no impairment existed. The issuer had adopted ASU No. 2017-04 Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The following deficiencies were identified: - The firm did not evaluate the reasonableness of the assumptions the issuer used to develop the fair value of its reporting units. (AS 2502.26 and .28) Financial statement audit only | AS 2502.26; AS 2502.28 | |
| 2 | Goodwill and Intangible Assets | To test goodwill for potential impairment the issuer compared the estimated fair value of the related reporting unit to the carrying value of the reporting unit and determined that no impairment existed. For finite-lived intangible assets the issuer determined that the recoverable amounts were the same as the carrying amounts and therefore no impairment existed. The issuer had adopted ASU No. 2017-04 Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The following deficiencies were identified: - With respect to the intangible assets the firm did not perform procedures to test the reasonableness of the issuer's assumption that the recoverable value of each asset was the same as its carrying value in light of events that would indicate that the carrying amount of the intangible assets may not be recoverable including the issuer's declining stock prices negative working capital and recurring operating losses and cash flow losses in conformity with FASB ASC Topic 360 Property Plant and Equipment. (AS 2810.30) Financial statement audit only | AS 2810.30 | |
| 3 | Goodwill and Intangible Assets | To test goodwill for potential impairment the issuer compared the estimated fair value of the related reporting unit to the carrying value of the reporting unit and determined that no impairment existed. For finite-lived intangible assets the issuer determined that the recoverable amounts were the same as the carrying amounts and therefore no impairment existed. The issuer had adopted ASU No. 2017-04 Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The following deficiencies were identified: - With respect to goodwill the firm did not identify and evaluate the significance to the financial statements of a departure from GAAP related to the omission of required disclosures that a relevant reporting unit had a negative carrying amount of net assets the amount of goodwill allocated to the reporting unit and in which reportable segment the reporting unit was included in conformity with FASB ASC Topic 350 Intangibles—Goodwill and Other. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 | |
| 4 | Debt | The issuer had outstanding convertible notes payable. The issuer disclosed that certain notes were with a party with which the issuer had pending litigation. The issuer also disclosed that a convertible note with a related party was modified during the year to change the conversion price. The following deficiencies were identified: - The firm did not evaluate whether the issuer's accounting for the conversion price modification was in conformity with FASB ASC Subtopic 470-20 Debt— Debt with Conversion and Other Options. (AS 2810.30) Financial statement audit only | AS 2810.30 | |
| 5 | Debt | The issuer had outstanding convertible notes payable. The issuer disclosed that certain notes were with a party with which the issuer had pending litigation. The issuer also disclosed that a convertible note with a related party was modified during the year to change the conversion price. The following deficiencies were identified: - The firm did not evaluate whether the pending litigation with the holder of certain notes would affect the financial statement classification of the notes. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 | |
| 6 | Debt | The issuer had outstanding convertible notes payable. The issuer disclosed that certain notes were with a party with which the issuer had pending litigation. The issuer also disclosed that a convertible note with a related party was modified during the year to change the conversion price. The following deficiencies were identified: - The firm did not perform procedures to determine whether the disclosures related to certain related party relationships and transactions were complete and accurate. (AS 2410.17; AS 2810.30 and .31) Financial statement audit only | AS 2410.17; AS 2810.30; AS 2810.31 |