- Inspection year
- 2022
- Report date
- 25-May-2023
- PCAOB release
- 104-2023-086
- Audits reviewed
- 1
- Audits w/ Part I.A deficiencies
- 1
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 3
- Part I.B deficiencies
- 2
- Report
- View PDF ↗
Deficiencies (3)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer generated revenue through two types of transactions: Method A and Method B. The issuer calculated Method B revenue by multiplying the number of products delivered by the quarterly average price per product for Method A revenue which was provided to the issuer by an unrelated party. The following deficiencies were identified: · The firm did not evaluate the relevance of the quarterly average price per product for Method A revenue used to calculate Method B revenue as the Method A price was inconsistent with the stated Method B product pricing terms defined by an agreement between the issuer and the unrelated party. (AS 1105.04 and .06) Financial statement audit only | AS 1105.4; AS 1105.6 | |
| 2 | Revenue | The issuer generated revenue through two types of transactions: Method A and Method B. The issuer calculated Method B revenue by multiplying the number of products delivered by the quarterly average price per product for Method A revenue which was provided to the issuer by an unrelated party. The following deficiencies were identified: · The firm did not perform sufficient substantive procedures to evaluate whether the issuer's recognition of Method B revenue was in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers because the firm did not evaluate whether Method B revenue which was substantially derived from nonmonetary exchanges had commercial substance. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 3 | Other Investments | The firm did not perform substantive procedures to test an equity method investment's unaudited financial statements and capital account for the last four months of the year which was used by the issuer to determine the carrying value of its investment beyond comparing the equity method investment's net income for that period to the comparable period of the previous year and tracing distributions received during the period to bank statements. (AS 2301.08 and .11) Financial statement audit only | AS 2301.8; AS 2301.11 | Significant risk |