- Inspection year
- 2021
- Report date
- 20-Oct-2022
- PCAOB release
- 104-2022-250
- Audits reviewed
- 5
- Audits w/ Part I.A deficiencies
- 4
- Part I.A deficiency rate
- 80%
- Part I.A deficiencies
- 13
- Part I.B deficiencies
- 1
- Report
- View PDF ↗
Deficiencies (13)
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 | Business Combinations | During the year the issuer acquired multiple businesses. For one business combination the firm did not perform any substantive procedures to test the fair value of the assets acquired and liabilities assumed. (AS 2502.15) Financial statement audit only | AS 2502.15 | |
| 2 | Business Combinations | For another business combination the issuer used an external specialist to estimate the fair value of certain of the acquired assets. For certain assets the fair values were determined using forecasted cash flows. The following deficiencies were identified: - As part of its assessment of the reasonableness of the cash-flow forecast for a certain asset the firm obtained evidence that appeared to contradict an assumption used by the specialist with respect to asset quantities. The firm did not perform procedures beyond inquiry of management to evaluate this contradictory evidence. (AS 2502.26 .28 .31 and .36) Financial statement audit only | AS 2502.26; AS 2502.28; AS 2502.31; AS 2502.36 | |
| 3 | Business Combinations | For another business combination the issuer used an external specialist to estimate the fair value of certain of the acquired assets. For certain assets the fair values were determined using forecasted cash flows. The following deficiencies were identified: - For certain assets the firm did not perform procedures beyond inquiry of management to evaluate the reasonableness of certain significant assumptions underlying the cash-flow forecasts. (AS 2502.26 and .28) Financial statement audit only | AS 2502.26; AS 2502.28 | |
| 4 | Business Combinations | For another business combination the issuer used an external specialist to estimate the fair value of certain of the acquired assets. For certain assets the fair values were determined using forecasted cash flows. The following deficiencies were identified: - The firm did not perform any procedures to test the completeness of certain liabilities assumed. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 5 | Business Combinations | For another business combination the issuer used an external specialist to estimate the fair value of certain of the acquired assets. For certain assets the fair values were determined using forecasted cash flows. The following deficiencies were identified: - The firm did not perform any procedures to test the fair value of certain liabilities assumed. (AS 2502.15) Financial statement audit only | AS 2502.15 | |
| 6 | Business Combinations | For another business combination the issuer used an external specialist to estimate the fair value of certain of the acquired assets. For certain assets the fair values were determined using forecasted cash flows. The following deficiencies were identified: - The firm did not identify and appropriately address an inconsistency between the issuer's disclosure of goodwill and other liabilities associated with this acquisition and the issuer's supporting documentation. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 |
Issuer B3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue and Contract Liabilities | The issuer recognized certain revenue based on quantities and specified rates generally in exchange for noncash consideration. Any noncash consideration received at contract inception was recorded as a contract liability. The following deficiencies were identified: - The firm used data from the issuer's system in its procedures to test certain of this revenue. The firm did not test or in the alternative identify and test any controls over the accuracy and completeness of this data. (AS 1105.10) Financial statement audit only | AS 1105.10 | |
| 2 | Revenue and Contract Liabilities | The issuer recognized certain revenue based on quantities and specified rates generally in exchange for noncash consideration. Any noncash consideration received at contract inception was recorded as a contract liability. The following deficiencies were identified: - For certain other of this revenue the firm did not test the selling prices for individual services provided. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 3 | Revenue and Contract Liabilities | The issuer recognized certain revenue based on quantities and specified rates generally in exchange for noncash consideration. Any noncash consideration received at contract inception was recorded as a contract liability. The following deficiencies were identified: - The firm did not evaluate whether the method used by the issuer to determine the fair value of noncash consideration received was in conformity with FASB ASC Topic 820 Fair Value Measurement. (AS 2501.10) Financial statement audit only | AS 2501.10 |
Issuer C2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Inventory | The issuer reported a reserve for excess and obsolete inventory. The firm did not perform procedures to test this reserve beyond reading issuer-prepared memos vouching certain historical sales amounts used in the determination of the reserve and performing recalculations of certain amounts. (AS 2501.07) Financial statement audit only | AS 2501.7 | |
| 2 | Inventory | The issuer held certain inventory at a public warehouse. The firm performed an inventory observation subsequent to year end. The firm did not test (1) whether the contents of counted pallets and boxes matched the items included in the issuer's year-end inventory; and (2) intervening transactions between the issuer's year end and the date of its inventory observation. (AS 2510.14) Financial statement audit only | AS 2510.14 |
Issuer D2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm used certain price and quantity information from external sources in its substantive testing of revenue but did not perform any procedures to evaluate the relevance and reliability of such information. (AS 1105.04 and .06) Financial statement audit only | AS 1105.4; AS 1105.6 | |
| 2 | Revenue | The firm developed an independent expectation to test revenue but did not evaluate the relevance and reliability of data used to develop its expectation. (AS 1105.04 and .06; AS 2501.23) Financial statement audit only | AS 1105.4; AS 1105.6 |