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PricewaterhouseCoopers LLP
Canada · PricewaterhouseCoopers International Limited · Triennially Inspected
- Inspection year
- 2022
- Report date
- 26-Jun-2023
- PCAOB release
- 104-2023-110
- Audits reviewed
- 8
- Audits w/ Part I.A deficiencies
- 5
- Part I.A deficiency rate
- 63%
- Part I.A deficiencies
- 15
- Part I.B deficiencies
- 1
- Report
- View PDF ↗
Deficiencies (15)
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 | Long-Lived Assets | The firm selected for testing a control that consisted of management's review of the impairment analysis of long-lived assets. The firm did not identify and test any controls over the accuracy and completeness of a report which included discounted cash flows used in the operation of this control. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | Significant risk |
| 2 | Business Combinations | The issuer engaged an independent qualified reserve engineer ('company's specialist') to estimate its oil and gas reserves ('reserve estimates') which were then used in the (1) calculation of depreciation depletion and amortization; (2) impairment analysis of long-lived assets; and (3) valuation of a business combination. The reserve estimates were also used in the operation of certain controls over the above activities that the firm selected for testing. The firm did not identify and test any controls over the (1) accuracy and completeness of information prepared by the issuer (2) relevance and reliability of data from external sources and (3) methods and assumptions; all of which were used by the company's specialist to develop the reserve estimates. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | Significant risk |
| 3 | Business Combinations | The firm's approach for substantively testing the reserve estimates was to test the issuer's process. The firm did not perform sufficient procedures to test the reserve estimates because the firm did not: · Test the accuracy and completeness of information prepared by the issuer and used by the company's specialist to develop the reserve estimates; (AS 1105.A8a) Both financial statement and ICFR audits | AS 1105.A8a | Significant risk |
| 4 | Business Combinations | The firm's approach for substantively testing the reserve estimates was to test the issuer's process. The firm did not perform sufficient procedures to test the reserve estimates because the firm did not: · Evaluate the relevance and reliability of external data used by the company's specialist to develop the reserve estimates; (AS 1105.A8a) Both financial statement and ICFR audits | AS 1105.A8a | Significant risk |
| 5 | Business Combinations | The firm's approach for substantively testing the reserve estimates was to test the issuer's process. The firm did not perform sufficient procedures to test the reserve estimates because the firm did not: · Evaluate the reasonableness of the assumptions developed by the company's specialist and used to develop the reserve estimates; (AS 1105.A8b) Both financial statement and ICFR audits | AS 1105.A8b | Significant risk |
| 6 | Business Combinations | The firm's approach for substantively testing the reserve estimates was to test the issuer's process. The firm did not perform sufficient procedures to test the reserve estimates because the firm did not: · Evaluate whether the methods used by the company's specialist to develop the reserve estimates were appropriate under the circumstances taking into account the requirements of the applicable financial reporting framework beyond inquiry of the methods used with the company's specialist. (AS 1105.A8c) Both financial statement and ICFR audits | AS 1105.A8c | Significant risk |
Issuer B2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | To test certain revenue the firm selected contracts for testing that met specific criteria to evaluate whether the revenue was appropriately recognized based on the terms of those contracts. The firm did not perform any substantive procedures to test the remaining population of revenue transactions from this revenue source. (AS 1105.27; AS 2301.08 and .11) Financial statement audit only | AS 1105.27; AS 2301.8; AS 2301.11 | Significant risk |
| 2 | Deferred Revenue | To test certain unbilled receivables and deferred revenue the firm selected for testing unbilled receivables and deferred revenue that met specific criteria to evaluate whether the balances tested were properly recorded. The firm did not perform any substantive procedures to test the remaining population of unbilled receivables and deferred revenue from this revenue source. (AS 1105.27; AS 2301.08) Financial statement audit only | AS 1105.27; AS 2301.8 |
Issuer C2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm did not perform sufficient procedures to test certain revenue because the firm did not perform any test of details to address the fraud risk related to the occurrence of revenue. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 2 | Revenue | The firm did not perform any substantive procedures to test the occurrence of certain other revenue. (AS 2301.08) Financial statement audit only | AS 2301.8 |
Issuer D4 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Inventory | The firm used the work of internal audit to evaluate the operating effectiveness of certain inventory controls but did not evaluate the quality and effectiveness of the work performed by internal audit to test these controls. (AS 2605.24) Both financial statement and ICFR audits | AS 2605.24 | |
| 2 | Inventory | To test the existence of raw materials inventory the firm observed the issuer's physical inventory counts at select locations. The firm did not perform sufficient procedures to test the existence of this inventory at year end because the firm's observation procedures were not suitable as the locations it selected for testing had no quantities of raw materials inventory on hand at the time of the observations. Therefore these observations did not provide any evidence of the quantity and physical condition of any raw materials inventory. (AS 2510.09) Both financial statement and ICFR audits | AS 2510.9 | |
| 3 | Inventory | To test the existence of raw materials inventory the firm observed the issuer's physical inventory counts at select locations. The firm did not perform any substantive procedures to test the existence of the remaining population of raw materials inventory. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 | |
| 4 | Inventory | The firm did not perform any substantive procedures to test the existence of work-in-progress inventory. (AS 2510.09) Both financial statement and ICFR audits | AS 2510.9 |
Issuer E1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Deferred Revenue | To test the existence of deferred revenue the firm selected a sample of items for testing. The sample size the firm used in its substantive test of details was too small to provide sufficient appropriate audit evidence because the firm did not take into account the characteristics of the population in determining its sample size. (AS 2315.16 .23 and .23A) Financial statement audit only | AS 2315.16; AS 2315.23; AS 2315.23A |