- Inspection year
- 2022
- Report date
- 26-Jun-2023
- PCAOB release
- 104-2023-104
- Audits reviewed
- 3
- Audits w/ Part I.A deficiencies
- 3
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 23
- Part I.B deficiencies
- 13
- Report
- View PDF ↗
Deficiencies (23)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A15 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm did not identify and evaluate a departure from GAAP related to the issuer's omission of disclosures required by FASB ASC Topic 280 Segment Reporting related to revenue from certain customers. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 | |
| 2 | Revenue | The issuer used an external party to assist in selling its products. In addition the issuer's license to sell certain products expired during the year. The following deficiencies were identified: · The firm did not identify obtain or evaluate the contractual arrangements between the issuer its customers and the external party. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 3 | Revenue | The issuer used an external party to assist in selling its products. In addition the issuer's license to sell certain products expired during the year. The following deficiencies were identified: · The firm did not evaluate whether it was appropriate for the issuer to recognize revenue subsequent to the expiration of its related license. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 4 | Revenue | The issuer used an external party to assist in selling its products. In addition the issuer's license to sell certain products expired during the year. The following deficiencies were identified: · The firm did not perform any procedures to test whether revenue was recognized at the appropriate amount. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 5 | Revenue | The issuer used an external party to assist in selling its products. In addition the issuer's license to sell certain products expired during the year. The following deficiencies were identified: · The firm did not perform any procedures to test or test any controls over the accuracy and completeness of information produced by the issuer that the firm used in its substantive procedures. (AS 1105.10) Financial statement audit only | AS 1105.10 | |
| 6 | Revenue | The issuer used an external party to assist in selling its products. In addition the issuer's license to sell certain products expired during the year. The following deficiencies were identified: · The firm did not perform any substantive procedures to test whether delivery had occurred. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 7 | Revenue | The issuer used an external party to assist in selling its products. In addition the issuer's license to sell certain products expired during the year. The following deficiencies were identified: · The firm did not evaluate the reliability of certain external information that it used in its substantive procedures. (AS 1105.04 and .06) Financial statement audit only | AS 1105.4; AS 1105.6 | |
| 8 | Accounts Receivable | To test accounts receivable the firm obtained evidence of subsequent cash receipts. The firm did not request the confirmation of accounts receivable or document how it overcame the presumption to perform confirmation procedures. (AS 2310.34 and .35) Financial statement audit only | AS 2310.34; AS 2310.35 | |
| 9 | Accounts Receivable | To test accounts receivable the firm obtained evidence of subsequent cash receipts. The firm did not evaluate the reliability of the evidence of subsequent cash receipts. (AS 1105.04 and .06) Financial statement audit only | AS 1105.4; AS 1105.6 | |
| 10 | Long-Lived Assets | The issuer engaged a specialist to develop an accounting estimate that was used to determine the valuation of certain long-lived assets. The following deficiencies were identified: · The firm did not sufficiently evaluate a significant assumption developed by the issuer because it did not take into account the issuer's ability to carry out an action related to the assumption. (AS 2501.16 and .17) Financial statement audit only | AS 2501.16; AS 2501.17 | Significant risk |
| 11 | Long-Lived Assets | The issuer engaged a specialist to develop an accounting estimate that was used to determine the valuation of certain long-lived assets. The following deficiencies were identified: · The firm did not perform any procedures to evaluate whether the methods used by the company's specialist were appropriate under the circumstances taking into account the requirements of the applicable financial reporting framework. (AS 1105.A8c) Financial statement audit only | AS 1105.A8c | Significant risk |
| 12 | Long-Lived Assets | The issuer engaged a specialist to develop an accounting estimate that was used to determine the valuation of certain long-lived assets. The following deficiencies were identified: · The firm did not perform any procedures to test or test controls over the accuracy and completeness of certain data produced by the issuer and used by the company's specialist. (AS 1105.A8a) Financial statement audit only | AS 1105.A8a | Significant risk |
| 13 | Long-Lived Assets | The issuer engaged a specialist to develop an accounting estimate that was used to determine the valuation of certain long-lived assets. The following deficiencies were identified: · The firm did not perform procedures to evaluate the relevance and reliability of external data that was used by the company's specialist. (AS 1105.A8a) Financial statement audit only | AS 1105.A8a | Significant risk |
| 14 | Long-Lived Assets | The issuer engaged a specialist to develop an accounting estimate that was used to determine the valuation of certain long-lived assets. The following deficiencies were identified: · The firm did not perform any procedures to evaluate certain other significant assumptions that were developed by the issuer. (AS 2501.16) Financial statement audit only | AS 2501.16 | Significant risk |
| 15 | Long-Lived Assets | The firm did not perform any procedures beyond obtaining a memorandum to evaluate the issuer's conclusion that there were no impairment indicators related to certain other long-lived assets. (AS 2501.07) Financial statement audit only | AS 2501.7 | Significant risk |
Issuer B2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Cash | The firm received a response to its cash confirmation request and included a scanned version of the response in the work papers. The firm did not maintain control over the confirmation response because the firm did not know how the response was received. (AS 2310.28) Financial statement audit only | AS 2310.28 | |
| 2 | Long-Lived Assets | The issuer capitalized expenditures related to the development of a long-lived asset. The firm did not perform substantive procedures beyond inquiry to determine whether the expenditures qualified for capitalization as a long-lived asset. (AS 2301.08) Financial statement audit only | AS 2301.8 |
Issuer C6 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Certain Assets | The issuer used a discounted cash flow analysis to test certain assets for impairment at year end. The firm's approach for substantively testing this analysis was to develop an independent expectation of the estimate which included developing overall assumptions for revenue that included several underlying assumptions. The following deficiencies were identified: · The firm did not perform sufficient procedures to demonstrate it had a reasonable basis for an underlying assumption it developed because the firm obtained evidence that did not support the amount of the assumption. (AS 2501.22) Financial statement audit only | AS 2501.22 | Significant risk |
| 2 | Certain Assets | The issuer used a discounted cash flow analysis to test certain assets for impairment at year end. The firm's approach for substantively testing this analysis was to develop an independent expectation of the estimate which included developing overall assumptions for revenue that included several underlying assumptions. The following deficiencies were identified: · The firm did not perform any procedures to demonstrate it had a reasonable basis for a second underlying assumption it developed. (AS 2501.22) Financial statement audit only | AS 2501.22 | Significant risk |
| 3 | Certain Assets | The issuer used a discounted cash flow analysis to test certain assets for impairment at year end. The firm's approach for substantively testing this analysis was to develop an independent expectation of the estimate which included developing overall assumptions for revenue that included several underlying assumptions. The following deficiencies were identified: · The firm did not perform sufficient procedures to demonstrate it had a reasonable basis for a third underlying assumption it developed because the firm limited its procedures to obtaining evidence that indicated its assumption may not have been accurate. (AS 2501.22) Financial statement audit only | AS 2501.22 | Significant risk |
| 4 | Certain Assets | The issuer used a discounted cash flow analysis to test certain assets for impairment at year end. The firm's approach for substantively testing this analysis was to develop an independent expectation of the estimate which included developing overall assumptions for revenue that included several underlying assumptions. The following deficiencies were identified: · The firm did not perform procedures to evaluate the relevance of historical results of another company that it used to conclude that its overall assumptions for revenue were reasonable. (AS 1105.04 and .06) Financial statement audit only | AS 1105.4; AS 1105.6 | Significant risk |
| 5 | Certain Assets | The firm developed certain other assumptions that it used in its independent expectation. The firm did not perform sufficient procedures to demonstrate it had a reasonable basis for those assumptions because it used the historical results of another company to substantiate its assumptions without evaluating whether the historical results of the other company were relevant. (AS 1105.04 and .06; AS 2501.22) Financial statement audit only | AS 1105.4; AS 1105.6; AS 2501.22 | Significant risk |
| 6 | Cash | The firm received an electronic response to one of its cash confirmation requests. The firm did not consider performing procedures to address the risks associated with the electronic response such as verifying the source and contents of the confirmation response. (AS 2310.29) Financial statement audit only | AS 2310.29 |