- Inspection year
- 2021
- Report date
- 20-Oct-2022
- PCAOB release
- 104-2022-248a
- Audits reviewed
- 3
- Audits w/ Part I.A deficiencies
- 3
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 17
- Part I.B deficiencies
- 10
- Report
- View PDF ↗
Deficiencies (17)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A10 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer entered into a contract with a customer that contained multiple products and services. The following deficiencies were identified: - The firm did not identify and appropriately address a departure from GAAP related to the issuer's recognition of all revenue under this arrangement up front which is not in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2810.30) Financial statement audit only | AS 2810.30 | |
| 2 | Revenue | The issuer entered into a contract with a customer that contained multiple products and services. The following deficiencies were identified: - The firm did not identify and appropriately address a departure from GAAP related to the issuer's omission of a disclosure required by FASB ASC Topic 280 Segment Reporting. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 | |
| 3 | Revenue | The issuer entered into a contract with a customer that contained multiple products and services. The following deficiencies were identified: - In its testing the firm identified evidence indicating that the issuer may not have had legal title to the products and services it offered under this arrangement. The firm did not perform any substantive procedures to evaluate this contradictory evidence and the related effect on revenue recognition. (AS 2301.08; AS 2810.03) Financial statement audit only | AS 2301.8; AS 2810.3 | |
| 4 | Revenue | The issuer entered into a contract with a customer that contained multiple products and services. The following deficiencies were identified: - The firm did not perform any substantive procedures to evaluate whether the issuer's conclusion that the products and services sold under this arrangement consisted of a single performance obligation was in conformity with FASB ASC Topic 606. (AS 2810.30) Financial statement audit only | AS 2810.30 | |
| 5 | Revenue | The issuer entered into a contract with a customer that contained multiple products and services. The following deficiencies were identified: - The firm did not perform any substantive procedures beyond inquiry of management to test whether the performance obligation was satisfied prior to the recognition of revenue. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 6 | Business Combinations | During the year the issuer merged with another company in a business combination. The firm did not evaluate whether the issuer appropriately recognized and measured this merger in conformity with FASB ASC Topic 805 Business Combinations. (AS 2810.30) Financial statement audit only | AS 2810.30 | |
| 7 | Certain Assets | The firm did not perform any substantive procedures to test the value of a certain asset. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 8 | Certain Assets | With respect to a certain asset to evaluate the possible impairment of this asset the issuer estimated the fair value of this asset using forecasted cash flows and other assumptions. The firm did not perform any procedures beyond inquiry of management and reviewing the issuer's analysis to test the issuer's fair value measurement. (AS 2502.15) Financial statement audit only | AS 2502.15 | |
| 9 | Certain Assets | With respect to a certain asset to evaluate the possible impairment of this asset the issuer estimated the fair value of this asset using forecasted cash flows and other assumptions. The firm did not perform any procedures to evaluate whether events and circumstances continued to support the established useful life for this asset. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 10 | Related Party Transactions | The firm included evidence in its audit work papers indicating that an entity associated with a related party transaction was inconsistent with the entity disclosed in the financial statements for this transaction. The firm did not perform any procedures to evaluate this contradictory evidence and whether it had an effect on the financial statement disclosures. (AS 2410.17; AS 2810.03) Financial statement audit only | AS 2410.17; AS 2810.3 |
Issuer B4 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Accounts Receivable | The issuer did not record an allowance for doubtful accounts based on an assumption. The firm's approach for evaluating the reasonableness of this assumption was to develop an independent expectation of the issuer's assumption. The following deficiencies were identified: - The firm did not demonstrate that it had a reasonable basis for an assumption it used to develop its independent expectation. (AS 2501.16) Financial statement audit only | AS 2501.16 | |
| 2 | Accounts Receivable | With respect to Accounts Receivable the issuer did not record an allowance for doubtful accounts based on an assumption. The firm's approach for evaluating the reasonableness of this assumption was to develop an independent expectation of the issuer's assumption. The following deficiencies were identified: - The firm did not perform any procedures to test or in the alternative identify and test any controls over the accuracy and completeness of issuer data that the firm used to develop its independent expectation. (AS 1105.10) Financial statement audit only | AS 1105.10 | |
| 3 | Business Combinations | During the year the issuer merged with another company in a business combination. The firm did not evaluate whether the issuer appropriately recognized and measured this merger in conformity with FASB ASC Topic 805. (AS 2810.30) Financial statement audit only | AS 2810.30 | |
| 4 | Significant Estimates | The firm's approach for substantively testing a significant estimate was to develop an independent expectation. The firm did not demonstrate that it had a reasonable basis for its independent expectation. (AS 2501.22) Financial statement audit only | AS 2501.22 |
Issuer C3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm's substantive procedures to test revenue included testing a sample of revenue transactions and performing year-end cut-off procedures. The following deficiencies were identified: - For certain selected transactions the firm did not perform any procedures to test whether performance obligations had been satisfied prior to the recognition of revenue. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 2 | Revenue | The firm's substantive procedures to test revenue included testing a sample of revenue transactions and performing year-end cut-off procedures. The following deficiencies were identified: - For contracts with multiple performance obligations the firm did not perform substantive procedures to test the allocation of the transaction price to each performance obligation beyond comparing the allocation to the payment terms in the contract. (AS 2501.07) Financial statement audit only | AS 2501.7 | |
| 3 | Revenue | The firm's substantive procedures to test revenue included testing a sample of revenue transactions and performing year-end cut-off procedures. The following deficiencies were identified: - The firm did not perform any procedures to test or in the alternative identify and test any controls over the completeness of the revenue transactions tested in its cut-off procedures. (AS 1105.10) Financial statement audit only | AS 1105.10 |