- Inspection year
- 2021
- Report date
- 20-Oct-2022
- PCAOB release
- 104-2022-251a
- Audits reviewed
- 1
- Audits w/ Part I.A deficiencies
- 1
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 4
- Part I.B deficiencies
- 3
- Report
- View PDF ↗
Deficiencies (4)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A4 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Long-Lived Assets | The issuer performed an impairment analysis for certain long-lived assets using discounted cash flow forecasts that included the estimate of total revenues. The estimate of total revenues was also used in determining amortization expense associated with these assets. The following deficiencies were identified: - The firm did not perform any substantive procedures beyond inquiry of management and reading an issuer-prepared memorandum to evaluate the reasonableness of the significant assumptions underlying estimated total revenues including taking into account factors affecting the issuer's intent and ability to carry out those assumptions. (AS 2501.16 and .17) Financial statement audit only | AS 2501.16; AS 2501.17 | |
| 2 | Long-Lived Assets | The issuer performed an impairment analysis for certain long-lived assets using discounted cash flow forecasts that included the estimate of total revenues. The estimate of total revenues was also used in determining amortization expense associated with these assets. The following deficiencies were identified: - The firm did not sufficiently evaluate the reasonableness of the discount rate used by the issuer in its impairment analysis. Specifically the firm compared the discount rate to the stated rate on the issuer's outstanding debt but did not perform any procedures to evaluate whether the stated rate reflected the weighted average cost of capital of the issuer plus a risk premium representing the risk associated with acquiring the asset. (AS 2501.16) Financial statement audit only | AS 2501.16 | |
| 3 | Long-Lived Assets | The issuer performed an impairment analysis for certain long-lived assets using discounted cash flow forecasts that included the estimate of total revenues. The estimate of total revenues was also used in determining amortization expense associated with these assets. The following deficiencies were identified: - The firm did not perform any substantive procedures to test or in the alternative identify and test controls over the accuracy and completeness of disaggregated asset data used by the issuer in its impairment analysis and determination of amortization expense. (AS 1105.10) Financial statement audit only | AS 1105.10 | |
| 4 | Journal Entries | The firm identified for testing journal entries meeting certain fraud criteria and then reviewed the listing of those journal entries for unusual entries. The firm did not select journal entries and other adjustments for testing. (AS 2401.61) Financial statement audit only | AS 2401.61 |