- Inspection year
- 2022
- Report date
- 24-Aug-2023
- PCAOB release
- 104-2023-152
- Audits reviewed
- 3
- Audits w/ Part I.A deficiencies
- 3
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 7
- Part I.B deficiencies
- 6
- Report
- View PDF ↗
Deficiencies (7)
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 | Intangible Assets | During the year the issuer entered into agreements to jointly develop certain products and recorded the amounts paid in connection with these agreements as finite-lived intangible assets. The firm did not evaluate whether the issuer's capitalization of these costs met the requirements of FASB ASC Topic 730 Research and Development. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 2 | Intangible Assets | During the year the issuer entered into agreements to jointly develop certain products and recorded the amounts paid in connection with these agreements as finite-lived intangible assets. The firm did not perform procedures beyond inquiry to test the useful life established for these assets. (AS 2501.07) Financial statement audit only | AS 2501.7 | |
| 3 | Equity-Related Transactions | During the year the issuer granted shares to non-employees for services. The firm's approach for substantively testing the fair value of these shares was to test the issuer's process. The firm did not evaluate whether the method used by the issuer to develop the fair value of these shares was (1) in conformity with the requirements of GAAP including FASB ASC Topic 820 Fair Value Measurement and (2) appropriate for the nature of the related account taking into account the firm's understanding of the issuer and its environment. (AS 2501.10) Financial statement audit only | AS 2501.10 |
Issuer B2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Business Combinations | During the year the issuer acquired a business and engaged a specialist to assist it in determining the fair value of the resulting noncontrolling interest and goodwill. The following deficiency was identified: · The firm did not perform any procedures to evaluate the reliability of certain information used by the company's specialist to determine the fair value of these accounts. (AS 1105.A8a) Financial statement audit only | AS 1105.A8a | Significant risk |
| 2 | Business Combinations | During the year the issuer acquired a business and engaged a specialist to assist it in determining the fair value of the resulting noncontrolling interest and goodwill. The following deficiency was identified: · The firm did not perform any procedures to evaluate the relevance and reliability of the work of the company's specialist because it did not identify that (1) certain information in the company specialist's valuation report was inconsistent with a disclosure in the issuer's financial statements and (2) the company's specialist report was not final even though the issuer disclosed that it had completed its valuation of the accounts. (AS 1105.A9 and .A10) Financial statement audit only | AS 1105.A10; AS 1105.A9 | Significant risk |
Issuer C2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Derivative Liabilities | The issuer reported derivative liabilities at fair value. The firm did not perform any procedures beyond inquiry of management and testing certain inputs used in the calculation to test the fair value of the derivative liabilities. (AS 2501.07) Financial statement audit only | AS 2501.7 | Significant risk |
| 2 | Journal Entries | The firm did not select journal entries and other adjustments that met its identified fraud characteristics for testing. (AS 2401.61) Financial statement audit only | AS 2401.61 |