- Inspection year
- 2022
- Report date
- 14-Sep-2023
- PCAOB release
- 104-2023-163
- Audits reviewed
- 2
- Audits w/ Part I.A deficiencies
- 2
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 29
- Part I.B deficiencies
- 2
- Report
- View PDF ↗
Deficiencies (29)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A22 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Rental Properties | The issuer used an information-technology (IT) system that was hosted by a service organization to initiate process and record transactions related to (1) revenue and (2) rental properties. In its testing of controls over these accounts the firm selected for testing various automated and IT-dependent manual controls that used data and reports generated by this IT system. The firm obtained the service auditor's report and identified for testing certain complementary user entity controls (CUECs) that the service auditor's report described as necessary. As a result of the following deficiencies in the firm's testing of the CUECs the firm's testing of these automated and IT-dependent controls was not sufficient. (AS 2201.46) Both financial statement and ICFR audits | AS 2201.46 | |
| 2 | Rental Properties | The issuer used an information-technology (IT) system that was hosted by a service organization to initiate process and record transactions related to (1) revenue and (2) rental properties. In its testing of controls over these accounts the firm selected for testing various automated and IT-dependent manual controls that used data and reports generated by this IT system. The firm obtained the service auditor's report and identified for testing certain complementary user entity controls (CUECs) that the service auditor's report described as necessary. · The firm selected for testing a control that included the periodic review of user access. The firm did not evaluate the specific review procedures that the control owners performed to determine whether access granted was and continued to be appropriate. (AS 2201.42 .44 and .B22) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44; AS 2201.B22 | |
| 3 | Rental Properties | The issuer used an information-technology (IT) system that was hosted by a service organization to initiate process and record transactions related to (1) revenue and (2) rental properties. In its testing of controls over these accounts the firm selected for testing various automated and IT-dependent manual controls that used data and reports generated by this IT system. The firm obtained the service auditor's report and identified for testing certain complementary user entity controls (CUECs) that the service auditor's report described as necessary. · The firm did not identify and test any controls over change management that addressed changes to automated controls or system-generated reports. (AS 2201.39 and .B22) Both financial statement and ICFR audits | AS 2201.39; AS 2201.B22 | |
| 4 | Rental Properties | The issuer used an information-technology (IT) system that was hosted by a service organization to initiate process and record transactions related to (1) revenue and (2) rental properties. In its testing of controls over these accounts the firm selected for testing various automated and IT-dependent manual controls that used data and reports generated by this IT system. The firm obtained the service auditor's report and identified for testing certain complementary user entity controls (CUECs) that the service auditor's report described as necessary. · The firm did not identify and test any controls over the accuracy and completeness of the asset acquisitions recorded into this IT system. (AS 2201.39 and .B22) Both financial statement and ICFR audits | AS 2201.39; AS 2201.B22 | |
| 5 | Rental Properties | The issuer also used an IT system that was hosted by a service organization to perform account reconciliations using data manually uploaded from the IT system discussed above. The firm selected for testing the automated control over these account reconciliations. As a result of the following deficiencies in the firm's testing of CUECs the firm's testing of this automated control was not sufficient. (AS 2201.46) Both financial statement and ICFR audits | AS 2201.46 | |
| 6 | Rental Properties | The issuer also used an IT system that was hosted by a service organization to perform account reconciliations using data manually uploaded from the IT system discussed above. The firm selected for testing the automated control over these account reconciliations. · The firm did not identify and test any controls over user access that addressed newly hired and terminated employees. (AS 2201.39 and .B22) Both financial statement and ICFR audits | AS 2201.39; AS 2201.B22 | |
| 7 | Rental Properties | The issuer also used an IT system that was hosted by a service organization to perform account reconciliations using data manually uploaded from the IT system discussed above. The firm selected for testing the automated control over these account reconciliations. · The firm did not identify and test any controls over change management. (AS 2201.39 and .B22) Both financial statement and ICFR audits | AS 2201.39; AS 2201.B22 | |
| 8 | Rental Properties | The issuer also used an IT system that was hosted by a service organization to perform account reconciliations using data manually uploaded from the IT system discussed above. The firm selected for testing the automated control over these account reconciliations. · The firm did not identify and test any controls over the accuracy and completeness of the data uploaded into this IT system. (AS 2201.39 and .B22) Both financial statement and ICFR audits | AS 2201.39; AS 2201.B22 | |
| 9 | Revenue | The firm selected for testing a control over the review of revenue by property. The firm did not evaluate the review procedures that the control owner performed including the procedures to identify items for follow up and the procedures to determine whether those items were appropriately resolved. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 10 | Revenue | The firm selected for testing a control over the review of revenue by property. The firm did not identify and test any controls over the accuracy and completeness of certain issuer-prepared information used in the operation of this control. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 11 | Revenue | The firm did not identify and test any controls over the recognition of the amount of straight-line rent and related revenue. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 12 | Revenue | The firm selected for testing a control over the review of lease classifications. The firm did not identify and test any controls over the accuracy of certain issuer-prepared information used in the operation of this control. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 13 | Rental Properties | The firm did not identify and test any controls over the calculation of depreciation expense. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 14 | Rental Properties | The firm selected for testing controls over the review of the acquisition of rental properties and the evaluation of impairment. The firm did not evaluate the review procedures that the control owners performed including the procedures to identify items for follow up and the procedures to determine whether those items were appropriately resolved. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 15 | Rental Properties | The firm selected for testing controls over the review of the acquisition of rental properties and the evaluation of impairment. The firm did not identify and test any controls over the accuracy and completeness of certain issuer-prepared information used in the operation of these controls. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 16 | Rental Properties | During the year the issuer acquired certain rental properties that it accounted for as asset acquisitions. The issuer allocated the purchase price in each acquisition primarily to land and buildings. The following deficiency were identified: · The firm did not perform substantive procedures beyond obtaining and reading an issuer memorandum to evaluate the appropriateness of the issuer's accounting for these transactions. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 | |
| 17 | Rental Properties | During the year the issuer acquired certain rental properties that it accounted for as asset acquisitions. The issuer allocated the purchase price in each acquisition primarily to land and buildings. The following deficiency was identified: · The firm did not perform any substantive procedures to evaluate the issuer's conclusions that these acquisitions did not result in any intangible assets. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 | |
| 18 | Rental Properties | During the year the issuer acquired certain rental properties that it accounted for as asset acquisitions. The issuer allocated the purchase price in each acquisition primarily to land and buildings. The following deficiency was identified: · The firm did not evaluate whether the method used by the issuer to allocate the purchase price and estimate the fair value for the acquired land and buildings was in conformity with the requirements of the applicable reporting framework and appropriate for the nature of the account taking into account the firm's understanding of the issuer and its environment. (AS 2501.10) Both financial statement and ICFR audits | AS 2501.10 | |
| 19 | Rental Properties | During the year the issuer acquired certain rental properties that it accounted for as asset acquisitions. The issuer allocated the purchase price in each acquisition primarily to land and buildings. The following deficiency was identified: · The firm did not evaluate the relevance and reliability of information that was used to determine the fair value of the acquired land and buildings. (AS 1105.04 and .06) Both financial statement and ICFR audits | AS 1105.4; AS 1105.6 | |
| 20 | Rental Properties | The issuer performed certain quantitative analyses to evaluate whether there were events or changes in circumstances that indicated that its rental properties' carrying values may not be recoverable. The following deficiency was identified: · The firm did not perform substantive procedures to test the accuracy of certain data the issuer used in these analyses. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 21 | Rental Properties | The issuer performed certain quantitative analyses to evaluate whether there were events or changes in circumstances that indicated that its rental properties' carrying values may not be recoverable. The following deficiency was identified: · The firm did not perform substantive procedures to evaluate the reasonableness of certain significant assumptions that the issuer used in these analyses beyond comparing them to the assumptions used in the prior year analyses. (AS 2501.16) Both financial statement and ICFR audits | AS 2501.16 | |
| 22 | Rental Properties | The issuer performed certain quantitative analyses to evaluate whether there were events or changes in circumstances that indicated that its rental properties' carrying values may not be recoverable. The following deficiency was identified: · The firm did not perform substantive procedures to evaluate the reasonableness of certain other significant assumptions beyond comparing certain information used in the issuer's analyses to determine these assumptions to an external source. (AS 2501.16) Both financial statement and ICFR audits | AS 2501.16 |
Issuer B7 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Certain Assets | The issuer engaged an external specialist to determine the fair value of certain assets. The company's specialist used discounted cash flow models in its valuation. The following deficiency was identified: · The firm did not evaluate the relevance and/or reliability of certain data from sources external to the issuer that the company's specialist used to develop significant assumptions. (AS 1105.A8a) Financial statement audit only | AS 1105.A8a | |
| 2 | Certain Assets | The issuer engaged an external specialist to determine the fair value of certain assets. The company's specialist used discounted cash flow models in its valuation. The following deficiency was identified: · The firm did not perform substantive procedures to evaluate the reasonableness of significant assumptions related to the time periods that were developed by the company's specialist and used in the discounted cash flow models beyond comparing them to certain issuer documentation that indicated shorter time periods and concluding that the shorter time periods were more conservative. (AS 1105.A8b) Financial statement audit only | AS 1105.A8b | |
| 3 | Certain Assets | The issuer engaged an external specialist to determine the fair value of certain assets. The company's specialist used discounted cash flow models in its valuation. The following deficiency was identified: · The firm did not perform any substantive procedures to evaluate the reasonableness of certain other significant assumptions developed by the company's specialist. (AS 1105.A8b) Financial statement audit only | AS 1105.A8b | |
| 4 | Certain Assets | The issuer engaged an external specialist to determine the fair value of certain assets. The company's specialist used discounted cash flow models in its valuation. The following deficiency was identified: · The firm did not perform any substantive procedures to evaluate the reasonableness of the significant assumptions developed by the issuer. (AS 2501.16) Financial statement audit only | AS 2501.16 | |
| 5 | Certain Assets | The firm did not perform any procedures to test an estimate related to these assets including consideration of certain contrary evidence that was included in the firm's work papers. (AS 2501.07; AS 2810.03) Financial statement audit only | AS 2501.7; AS 2810.3 | |
| 6 | Certain Assets | To test certain other assets the firm selected balances that exceeded a monetary threshold and then selected one item for each of the selected balances for testing. The firm did not perform procedures to test the remaining population. (AS 1105.27; AS 2301.08) Financial statement audit only | AS 1105.27; AS 2301.8 | |
| 7 | Certain Assets | The firm did not perform any substantive procedures to test an estimate related to these assets. (AS 2501.07) Financial statement audit only | AS 2501.7 |