- Inspection year
- 2022
- Report date
- 10-Aug-2023
- PCAOB release
- 104-2023-138
- Audits reviewed
- 2
- Audits w/ Part I.A deficiencies
- 2
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 8
- Part I.B deficiencies
- 7
- Report
- View PDF ↗
Deficiencies (8)
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 | Revenue | The firm's substantive procedures to test revenue included testing a selection of revenue transactions and performing year-end cut-off procedures. The following deficiency was identified: · The firm did not perform sufficient procedures to evaluate whether the issuer recognized revenue in accordance with FASB ASC 606 Revenue from Contracts with Customers (FASB ASC 606) because it did not perform procedures to evaluate whether (1) customers agreed to the price and quantity for certain revenue transactions selected for testing and (2) a customer contract met the five criteria described in FASB ASC 606 to qualify as such. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 2 | Revenue | The firm's substantive procedures to test revenue included testing a selection of revenue transactions and performing year-end cut-off procedures. The following deficiency was identified: · The firm did not perform sufficient procedures to test revenue cut-off because the firm did not consider contrary evidence related to certain revenue transactions selected for testing which indicated that the revenue may not have been recognized in the correct period. (AS 2301.08 and .13; AS 2810.03) Financial statement audit only | AS 2301.8; AS 2301.13; AS 2810.3 | |
| 3 | Revenue | The firm's substantive procedures to test revenue included testing a selection of revenue transactions and performing year-end cut-off procedures. The following deficiency was identified: · The firm did not perform any substantive procedures to test product returns. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 4 | Intangible Assets | The firm did not perform procedures to test certain intangible assets for impairment beyond comparing the book value of the assets to the corresponding revenue stream for the current year. (AS 2501.07) Financial statement audit only | AS 2501.7 | Significant risk |
| 5 | Intangible Assets | The firm did not perform procedures to test or test any controls over the accuracy and completeness of the revenue streams used in its impairment testing of these intangible assets. (AS 1105.10) Financial statement audit only | AS 1105.10 | Significant risk |
| 6 | Uncorrected Misstatements | The firm identified uncorrected misstatements in the current year audit. The firm did not accumulate certain uncorrected misstatements related to revenue and cost of goods sold including the firm's best estimate of the total misstatement in the related accounts and disclosures tested and evaluate whether they were material individually or in combination with other misstatements. (AS 2810.10 .12 and .17) Financial statement audit only | AS 2810.10; AS 2810.12; AS 2810.17 |
Issuer B2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Accounts Receivable | The firm did not perform any substantive procedures to test the allowance for doubtful accounts. (AS 2501.07) Financial statement audit only | AS 2501.7 | Significant risk |
| 2 | Financial Reporting and Close | The firm did not perform any procedures to test an adjustment recorded by the issuer during the financial reporting and close process. (AS 2301.08 and .11) Financial statement audit only | AS 2301.8; AS 2301.11 | Significant risk |