- Inspection year
- 2022
- Report date
- 28-Sep-2023
- PCAOB release
- 104-2023-179
- Audits reviewed
- 2
- Audits w/ Part I.A deficiencies
- 2
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 19
- Part I.B deficiencies
- 13
- Report
- View PDF ↗
Deficiencies (19)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A9 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Testing Controls | The firm did not identify and test any controls to support its opinion on the effectiveness of ICFR. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 2 | Testing Controls | The firm did not identify and address inconsistencies between the firm's unqualified opinion on ICFR and management's report on ICFR which identified multiple material weaknesses. (AS 2201.72 .73 and .C2) Both financial statement and ICFR audits | AS 2201.72; AS 2201.73; AS 2201.C2 | |
| 3 | Revenue | The firm did not perform any procedures to test revenue beyond documenting invoices were checked for total revenue. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 | |
| 4 | Revenue | The firm did not evaluate (1) whether the issuer was recognizing revenue in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers and (2) whether the revenue disclosures were accurate in light of certain information documented in the firm's work papers. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 | |
| 5 | Debt | The firm did not perform any procedures to test debt and a related transaction beyond obtaining agreements and performing recalculations of certain amounts. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 | |
| 6 | Significant Transactions | The firm did not perform any procedures to test a significant transaction. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 | |
| 7 | Significant Transactions | The firm did not identify and evaluate a departure from GAAP related to the transaction. (AS 2810.30 and .31) Both financial statement and ICFR audits | AS 2810.30; AS 2810.31 | |
| 8 | Fraud Procedures | The firm did not perform any procedures to identify and select journal entries and other adjustments for testing. (AS 2401.58) Both financial statement and ICFR audits | AS 2401.58 | |
| 9 | Fraud Procedures | The firm identified certain transactions that did not appear to have a clear business purpose or evidence of proper authorization. The firm did not evaluate whether the business purpose (or lack thereof) indicated that these transactions may have been entered into to engage in fraudulent financial reporting or conceal misappropriation of assets. (AS 2401.67) Both financial statement and ICFR audits | AS 2401.67 |
Issuer B10 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Testing Controls | The firm did not identify and test any controls to support its opinion on the effectiveness of ICFR. (AS 2201. 39) Both financial statement and ICFR audits | AS 2201.39 | |
| 2 | Testing Controls | In addition the firm did not identify and address inconsistencies between the firm's unqualified opinion on ICFR and management's report on ICFR which identified multiple material weaknesses. (AS 2201.72 .73 and .C2) Both financial statement and ICFR audits | AS 2201.72; AS 2201.73; AS 2201.C2 | |
| 3 | Revenue | The firm did not perform any procedures to test revenue recognition beyond documenting invoices were checked for certain revenue transactions. (AS 2301.08 and .11) Both financial statement and ICFR audits | AS 2301.8; AS 2301.11 | Significant risk |
| 4 | Revenue | In addition the firm did not identify and evaluate a departure from GAAP related to the omission of certain disclosures required by FASB ASC Topic 235 Notes to Financial Statements and FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2810.30 and .31) Both financial statement and ICFR audits | AS 2810.30; AS 2810.31 | Significant risk |
| 5 | Certain Assets | The firm's substantive procedures to test the existence and valuation of certain assets consisted of testing a sample of items. The firm did not perform sufficient procedures to test these assets because it (1) did not establish a basis to support the number of items selected in its sample as it did not appropriately take into account the relevant factors including the tolerable misstatement for the population allowable risk of incorrect acceptance and the characteristics of the population; (AS 2315.16 .19 .23 and .23A) Both financial statement and ICFR audits | AS 2315.16; AS 2315.19; AS 2315.23; AS 2315.23A | |
| 6 | Certain Assets | The firm's substantive procedures to test the existence and valuation of certain assets consisted of testing a sample of items. The firm did not perform sufficient procedures to test these assets because it did not test the completeness of the issuer-prepared report from which the sampled items were selected (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 7 | Certain Assets | The firm did not evaluate the relevance and reliability of information from external sources used to test the valuation of the assets. (AS 1105.04 and.06) Both financial statement and ICFR audits | AS 1105.4; AS 1105.6 | |
| 8 | Certain Assets | In addition the issuer recognized income related to the valuation of the assets. The firm did not perform any procedures to evaluate whether the recognition of the income was appropriate. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 | |
| 9 | Certain Assets | The firm did not perform any procedures to test whether the issuer's presentation and disclosure of the assets were in conformity with GAAP including not identifying and evaluating a departure from GAAP related to the issuer's omission of a required disclosure related to these assets. (AS 2301.08; AS 2810.30 and .31) Both financial statement and ICFR audits | AS 2301.8; AS 2810.30; AS 2810.31 | |
| 10 | Fraud Procedures | The firm did not (1) perform any procedures to obtain an understanding of the entity's financial reporting process and the controls over journal entries and other adjustments and (2) identify and select journal entries and other adjustments for testing. (AS 2401.58) Both financial statement and ICFR audits | AS 2401.58 |