- Inspection year
- 2021
- Report date
- 22-Dec-2022
- PCAOB release
- 104-2023-036a
- Audits reviewed
- 10
- Audits w/ Part I.A deficiencies
- 10
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 55
- Part I.B deficiencies
- 13
- Report
- View PDF ↗
Deficiencies (55)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A7 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm did not perform substantive procedures to test revenue beyond comparing it to prior year revenue and comparing certain revenue to the issuer's information system. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 2 | Revenue | The firm did not perform any substantive procedures to evaluate whether the issuer's revenue recognition policies were in accordance with GAAP. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 3 | Receivables | The firm did not perform substantive procedures to test certain receivables beyond comparing the balance to the sub-ledger. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 4 | Receivables | The firm did not perform substantive procedures to test certain other receivables beyond obtaining and reading memoranda from the issuer and a legal letter which did not include any conclusions with respect to these receivables. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 5 | Liabilities | The firm did not perform any substantive procedures to test certain liabilities. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 6 | Related Party Transactions | The firm did not evaluate whether the issuer properly identified its related parties and relationships and transactions with related parties. Further the firm did not evaluate whether the related party transactions were properly accounted for and disclosed in the financial statements. (AS 2410.14 and .17) Financial statement audit only | AS 2410.14; AS 2410.17 | |
| 7 | Related Party Transactions | The firm did not identify and appropriately address a GAAP departure related to the issuer's omission of a related party disclosure. (AS 2810.30 and .31) Financial statement audit only | AS 2410.17; AS 2810.30; AS 2810.31 |
Issuer B5 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Journal Entries | The firm identified journal entries and adjustments for testing. As part of its testing the firm documented that certain journal entry line items were not supported by proper documents and that certain of these journal entry line items did not have an appropriate business purpose. The firm did not evaluate whether the results of these procedures and other observations affected the assessment of fraud risks made throughout the audit and whether audit procedures should have been modified to respond to those risks. (AS 2810.28) Financial statement audit only | AS 2810.28 | |
| 2 | Gains on Discontinued Operations | The issuer reported gains from the sales of certain discontinued operations. The issuer reclassified certain amounts from equity to the gain on disposal. The firm did not perform substantive procedures beyond reviewing the issuer's accounting memorandum to test the reclassification of certain amounts from equity to the gain on disposal. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 3 | Gains on Discontinued Operations | The issuer reported gains from the sales of certain discontinued operations. The issuer reclassified certain amounts from equity to the gain on disposal. The firm did not perform sufficient procedures to test the assets liabilities and equity accounts included in the calculation of the gains on the sales because it limited its procedures to comparing the amounts to the respective general ledgers. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 4 | Gains on Discontinued Operations | The issuer reported gains from the sales of certain discontinued operations. The issuer reclassified certain amounts from equity to the gain on disposal. The firm did not identify and evaluate the significance to the financial statements of an error related to the issuer's use of an incorrect exchange rate at the date of certain of the sales to translate the assets liabilities and certain equity adjustments. (AS 2810.30) Financial statement audit only | AS 2810.30 | |
| 5 | Gains on Discontinued Operations | The issuer reported gains from the sales of certain discontinued operations. The issuer reclassified certain amounts from equity to the gain on disposal. The firm did not identify and evaluate the significance to the financial statements of errors in the disclosures of discontinued operations related to (1) an incorrect amount disclosed related to the gain on disposal for one sale and (2) the aggregation of the reclassification of certain equity adjustments for different discontinued operations within the gain on disposal for one sale. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 |
Issuer C6 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Audit Evidence | Prior to the report release date the firm did not complete all necessary audit procedures and obtain sufficient evidence to support the representations in the auditor's report. Specifically the firm completed the performance and review of a significant number of auditing procedures after the report release date. (AS 1105.04; AS 1215.15) Financial statement audit only | AS 1105.4; AS 1215.15 | |
| 2 | Business Combinations | During the year the issuer acquired a business and engaged a specialist to estimate the fair value of the acquired intangible assets and goodwill at the acquisition date. The firm's approach for substantively testing the fair value of these assets was to test the issuer's process. The firm did not perform sufficient substantive procedures to evaluate the reasonableness of certain significant assumptions developed by the issuer because the firm limited its procedures to obtaining issuer-prepared documents. (AS 2501.16) Financial statement audit only | AS 2501.16 | |
| 3 | Business Combinations | During the year the issuer acquired a business and engaged a specialist to estimate the fair value of the acquired intangible assets and goodwill at the acquisition date. The firm's approach for substantively testing the fair value of these assets was to test the issuer's process. The firm did not perform any substantive procedures to test or in the alternative identify and test controls over the accuracy and completeness of those documents. (AS 1105.10) Financial statement audit only | AS 1105.10 | |
| 4 | Business Combinations | During the year the issuer acquired a business and engaged a specialist to estimate the fair value of the acquired intangible assets and goodwill at the acquisition date. The firm's approach for substantively testing the fair value of these assets was to test the issuer's process. The firm did not perform any substantive procedures to evaluate the reasonableness of other significant assumptions developed by the issuer. (AS 2501.16) Financial statement audit only | AS 2501.16 | |
| 5 | Business Combinations | During the year the issuer acquired a business and engaged a specialist to estimate the fair value of the acquired intangible assets and goodwill at the acquisition date. The firm's approach for substantively testing the fair value of these assets was to test the issuer's process. The firm did not perform any substantive procedures to test the completeness existence and accuracy of the other assets acquired and liabilities assumed at the acquisition date. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 6 | Business Combinations | During the year the issuer acquired a business and engaged a specialist to estimate the fair value of the acquired intangible assets and goodwill at the acquisition date. The firm's approach for substantively testing the fair value of these assets was to test the issuer's process. The firm did not perform any substantive procedures to test the fair value of the other assets acquired and liabilities assumed at the acquisition date. (AS 2501.07) Financial statement audit only | AS 2501.7 |
Issuer D5 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue and Deferred Revenue | The firm did not perform substantive procedures to test whether the performance obligation had been satisfied when revenue was recognized beyond reviewing the issuer's internal invoices. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 2 | Revenue and Deferred Revenue | The firm did not perform substantive procedures to evaluate the completeness of deferred revenue beyond obtaining the issuer's internal documentation of revenue recognized. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 3 | Derivative Liabilities | The issuer reported derivative liabilities at fair value. The firm's approach for substantively testing the fair value of the derivative liabilities was to test the issuer's process. The firm did not perform any substantive procedures to evaluate the relevance and/or reliability of certain data the issuer used to develop assumptions used in its determination of the fair value. (AS 1105.04 and .06) Financial statement audit only | AS 1105.4; AS 1105.6 | |
| 4 | Derivative Liabilities | The issuer reported derivative liabilities at fair value. The firm's approach for substantively testing the fair value of the derivative liabilities was to test the issuer's process. The firm did not evaluate whether the method the issuer used to develop the fair value was in conformity with the applicable financial reporting framework including whether the data was appropriately used and significant assumptions appropriately applied and appropriate for the nature of the related account. (AS 2501.10) Financial statement audit only | AS 2501.10 | |
| 5 | Journal Entries | The firm did not perform any procedures to identify and select journal entries and other adjustments for testing. (AS 2401.58) Financial statement audit only | AS 2401.58 |
Issuer E8 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Discontinued Operations | The issuer reported discontinued operations classified as held for sale at year end including intangible assets. The issuer recorded an adjustment to measure an intangible asset at fair value less cost to sell ('adjustment') and an impairment for certain other intangible assets during the year. The firm did not sufficiently evaluate whether the adjustment of the intangible asset subject to amortization was determined in conformity with FASB ASC Topic 360 Property Plant and Equipment because the firm did not evaluate that the issuer appeared to remeasure the valuation of this asset based on the fair value of the discontinued operations as opposed to a fair value estimate of this asset. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 2 | Discontinued Operations | The issuer reported discontinued operations classified as held for sale at year end including intangible assets. The issuer recorded an adjustment to measure an intangible asset at fair value less cost to sell ('adjustment') and an impairment for certain other intangible assets during the year. The firm did not sufficiently evaluate whether the impairment of certain intangible assets not subject to amortization was determined in conformity with FASB ASC Topic 350 Intangibles - Goodwill and Other because the firm did not evaluate that the issuer appeared to determine the impairment of these assets based on the fair value of the discontinued operations as opposed to a fair value estimate of these intangible assets. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 3 | Discontinued Operations | The issuer reported discontinued operations classified as held for sale at year end including intangible assets. The issuer recorded an adjustment to measure an intangible asset at fair value less cost to sell ('adjustment') and an impairment for certain other intangible assets during the year. The firm did not perform substantive procedures beyond reviewing an issuer-prepared memorandum and recalculating the amounts to test the adjustment and impairment. (AS 2501.07) Financial statement audit only | AS 2501.7 | |
| 4 | Revenue | To test certain revenue the firm (1) confirmed certain revenue transactions and received two confirmations back with exceptions (2) selected revenue transactions above a threshold and a sample of transactions below that threshold for detail testing and (3) performed cut-off testing. The firm did not evaluate the nature of exceptions on the two returned confirmations. (AS 2310.33) Financial statement audit only | AS 2310.33 | |
| 5 | Revenue | To test certain revenue the firm (1) confirmed certain revenue transactions and received two confirmations back with exceptions (2) selected revenue transactions above a threshold and a sample of transactions below that threshold for detail testing and (3) performed cut-off testing. In determining its sample size for transactions below the threshold for detail testing the firm did not take into account the tolerable misstatement for the population and the allowable risk of incorrect acceptance. (AS 2315.16 .19 .23 and .23A) Financial statement audit only | AS 2315.16; AS 2315.19; AS 2315.23; AS 2315.23A | |
| 6 | Revenue | To test certain revenue the firm (1) confirmed certain revenue transactions and received two confirmations back with exceptions (2) selected revenue transactions above a threshold and a sample of transactions below that threshold for detail testing and (3) performed cut-off testing. The firm did not sufficiently perform substantive procedures to test or in the alternative identify and test controls over the accuracy and completeness of issuer-prepared information the firm used in its substantive procedures because the firm limited its procedures comparing the issuer-prepared information to other issuer-provided information. (AS 1105.10) Financial statement audit only | AS 1105.10 | |
| 7 | Accounts Receivable | The firm did not perform any substantive procedures to test the existence of accounts receivable. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 8 | Accounts Receivable | The firm did not perform any substantive procedures to test the valuation of accounts receivable. (AS 2501.07) Financial statement audit only | AS 2501.7 |
Issuer F9 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | For the majority of certain revenue the issuer concluded that there was a single performance obligation. The firm did not perform sufficient procedures to evaluate whether certain services offered as part of those transactions represented separate performance obligations because the firm concluded they were not separate performance obligations since the issuer had not performed the services during the year and did not evaluate whether the issuer would perform the services as part of completing the transactions. (AS 2301.08; AS 2810.03) Financial statement audit only | AS 2301.8; AS 2810.3 | |
| 2 | Revenue | For the majority of certain revenue the issuer concluded that there was a single performance obligation. The firm did not sufficiently test the transaction price because it did not evaluate whether the promised consideration included a variable amount. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 3 | Revenue | For the majority of certain revenue the issuer concluded that there was a single performance obligation. The issuer identified one transaction with multiple performance obligations. The firm did not perform procedures to evaluate the allocation of the transaction price to the performance obligations. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 4 | Revenue | For certain other revenue the firm did not obtain an understanding of the specific terms and provisions of the contracts to evaluate whether the issuer appropriately recognized revenue. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 5 | Business Combinations | During the prior year the issuer acquired a controlling interest in a business and during the current year engaged a specialist to estimate the final fair value of the non-controlling interest. The firm did not evaluate whether the model the company's specialist used to determine the fair value was appropriate under the circumstances. (AS 1105.A8c) Financial statement audit only | AS 1105.A8c | |
| 6 | Business Combinations | During the prior year the issuer acquired a controlling interest in a business and during the current year engaged a specialist to estimate the final fair value of the non-controlling interest. The firm did not evaluate the reasonableness of certain significant assumptions the company's specialist developed and used. (AS 1105.A8b) Financial statement audit only | AS 1105.A8b | |
| 7 | Goodwill and Intangible Assets | The issuer reported goodwill for several reporting units and recorded an impairment of goodwill for one of the reporting units during the year. The firm did not perform any substantive procedures to evaluate whether the issuer identified the reporting units in conformity with FASB ASC Topic 350. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 8 | Goodwill and Intangible Assets | The issuer identified impairment indicators for an intangible asset and engaged a specialist to estimate the fair value of the asset. The firm's approach for substantively testing the fair value of this asset was to test the issuer's process. The firm did not perform substantive procedures beyond inquiry to evaluate the reasonableness of certain significant assumptions the issuer developed that the company's specialist used. (AS 2501.16) Financial statement audit only | AS 2501.16 | |
| 9 | Goodwill and Intangible Assets | The issuer identified impairment indicators for an intangible asset and engaged a specialist to estimate the fair value of the asset. The firm's approach for substantively testing the fair value of this asset was to test the issuer's process. The firm did not sufficiently evaluate the reasonableness of another significant assumption developed by the issuer because it limited its procedures to inquiry and vouching an aspect of the assumption to support. (AS 2501.16) Financial statement audit only | AS 2501.16 |
Issuer G5 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Leases | The issuer reported right-of-use assets and lease liabilities. The issuer performed a recoverability test to determine whether these assets were impaired that included cash flows for years beyond the terms of the leases. The firm's approach for substantively testing the recoverability test was to test the issuer's process. The firm did not sufficiently evaluate whether any of the issuer's leases met the criteria for classification as finance leases in conformity with FASB ASC Topic 842 Leases because the firm did not perform procedures to determine whether (1) the lease term is for the major part of the remaining economic life of the underlying asset and (2) the present value of the of the lease payments exceeds substantially all of the fair value of the underlying asset. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 2 | Leases | The issuer reported right-of-use assets and lease liabilities. The issuer performed a recoverability test to determine whether these assets were impaired that included cash flows for years beyond the terms of the leases. The firm's approach for substantively testing the recoverability test was to test the issuer's process. The firm did not perform any substantive procedures to evaluate the reasonableness of the discount rate the issuer used to develop the estimate of lease liabilities. (AS 2501.16) Financial statement audit only | AS 2501.16 | |
| 3 | Leases | The issuer reported right-of-use assets and lease liabilities. The issuer performed a recoverability test to determine whether these assets were impaired that included cash flows for years beyond the terms of the leases. The firm's approach for substantively testing the recoverability test was to test the issuer's process. The firm did not perform any substantive procedures to determine whether the issuer developed the discount rate in conformity with FASB ASC Topic 842. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 4 | Leases | The issuer reported right-of-use assets and lease liabilities. The issuer performed a recoverability test to determine whether these assets were impaired that included cash flows for years beyond the terms of the leases. The firm's approach for substantively testing the recoverability test was to test the issuer's process. The firm did not sufficiently evaluate the reasonableness of cash flow projections used in the issuer's recoverability test because it did not take into account the issuer's ability to carry out the cash flow projections including its ability to generate cash flows for the years after the end of the terms of the leases. (AS 2501.16 and .17) Financial statement audit only | AS 2501.16; AS 2501.17 | |
| 5 | Leases | The issuer reported right-of-use assets and lease liabilities. The issuer performed a recoverability test to determine whether these assets were impaired that included cash flows for years beyond the terms of the leases. The firm's approach for substantively testing the recoverability test was to test the issuer's process. The firm did not perform sufficient procedures to test whether the issuer had identified all of the lease arrangements because it did not perform any procedures to test the completeness of the issuer's list of leases. (AS 1105.10) Financial statement audit only | AS 1105.10 |
Issuer H4 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue and Related Accounts | The issuer reported revenue from different types of services. The firm did not perform any substantive procedures to evaluate whether each type of service represented a separate performance obligation. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 2 | Revenue and Related Accounts | The firm did not perform substantive procedures to test revenue in excess of billings beyond comparing the balance to the subsidiary ledger. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 3 | Goodwill | The issuer reported goodwill for several reporting units and performed a quantitative assessment of the impairment of goodwill for each reporting unit. The firm's approach for substantively testing the quantitative assessments was to test the issuer's process. The firm did not evaluate the reliability of data from external sources the issuer used to determine certain assumptions. (AS 1105.04 and .06) Financial statement audit only | AS 1105.4; AS 1105.6 | |
| 4 | Goodwill | The issuer reported goodwill for several reporting units and performed a quantitative assessment of the impairment of goodwill for each reporting unit. The firm did not perform any substantive procedures to evaluate the reasonableness of certain assumptions developed by the issuer. (AS 2501.16) Financial statement audit only | AS 2501.16 |
Issuer I4 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue and Deferred Revenue | To test certain revenue the firm selected a sample of transactions. The firm did not perform substantive procedures to test whether the issuer satisfied its performance obligations for these transactions when revenue was recognized. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 2 | Revenue and Deferred Revenue | To test certain revenue the firm selected a sample of transactions. The firm did not perform substantive procedures to test whether the issuer satisfied its performance obligations related to certain other revenue. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 3 | Revenue and Deferred Revenue | The firm did not perform any substantive procedures to test a third type of revenue and the related deferred revenue. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 4 | Goodwill | The issuer engaged a specialist to perform a quantitative assessment of its goodwill. The firm did not perform substantive procedures to test the quantitative assessment beyond obtaining and reading the valuation report prepared by the company's specialist. Further the firm did not perform any procedures with respect to its use of the work of the company's specialist as audit evidence. (AS 1105.A1 - .A10; AS 2501.07) Financial statement audit only | AS 1105.A1; AS 1105.A10; AS 1105.A2; AS 1105.A3; AS 1105.A4; AS 1105.A5; AS 1105.A6; AS 1105.A7; AS 1105.A8; AS 1105.A9; AS 2501.7 |
Issuer J2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Long-Lived Assets | The issuer performed an impairment analysis using one asset group of its long-lived assets. The firm did not evaluate whether the issuer appropriately determined that the one asset group represented the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets in conformity with FASB ASC Topic 360 because it did not consider that the issuer appeared to aggregate the undiscounted cash flows from different groups of assets in the analysis. (AS 2301.08; AS 2810.03) Financial statement audit only | AS 2301.8; AS 2810.3 | |
| 2 | Long-Lived Assets | The issuer performed an impairment analysis using one asset group of its long-lived assets. The firm did not perform substantive procedures beyond reviewing the issuer's impairment analysis to test the valuation of the long-lived assets. (AS 2501.07) Financial statement audit only | AS 2501.7 |