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KPMG Auditores Independentes Ltda.
Brazil · KPMG International Cooperative · Triennially Inspected
- Inspection year
- 2022
- Report date
- 16-Oct-2023
- PCAOB release
- 104-2023-185
- Audits reviewed
- 3
- Audits w/ Part I.A deficiencies
- 1
- Part I.A deficiency rate
- 33%
- Part I.A deficiencies
- 12
- Part I.B deficiencies
- 3
- Report
- View PDF ↗
Deficiencies (12)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A12 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Long-Lived Assets | The firm selected for testing controls that consisted of the issuer's reviews of (1) additions to property plant and equipment (PP&E) and whether those costs were allocated to the appropriate project within the issuer's accounting system and (2) PP&E write-offs and whether those write-offs were appropriately supported and approved. The firm did not identify and test any controls over the completeness of the system-generated reports used in the operation of these controls. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 2 | Long-Lived Assets | The sample sizes the firm used in certain of its substantive procedures to test additions to and write-offs of PP&E were too small to provide sufficient appropriate audit evidence because these procedures were designed based on a level of control reliance that was not supported due to the deficiencies in the firm's control testing discussed above. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A) Both financial statement and ICFR audits | AS 2301.16; AS 2301.18; AS 2301.37; AS 2315.19; AS 2315.23; AS 2315.23A | |
| 3 | Long-Lived Assets | The firm did not identify and evaluate a departure from IFRS related to the issuer's use of (1) post-tax future cash flows and a post-tax discount rate (2) future cash flows that included cash flows of certain forecasted divestments and (3) for the cash-generating units ('CGUs') of one segment estimated future cash flows occurring subsequent to the expiration of lease contracts that were not reasonably certain of being renewed to estimate the value-in-use ('VIU') of its CGUs to evaluate long-lived assets for impairment which was not in conformity with International Accounting Standard 36 Impairment of Assets. (AS 2810.30) Both financial statement and ICFR audits | AS 2810.30 | |
| 4 | Long-Lived Assets | The firm's approach for substantively testing the valuation of long-lived assets was to test the issuer's process. With respect to the inputs methods and assumptions used in the issuer's VIU and depreciation and amortization rate calculations for one of its segments the following additional deficiency was identified: · The firm selected for testing controls that consisted of the issuer's reviews of certain issuer-produced data and assumptions used by a (1) company-employed specialist to develop certain inputs and (2) company-engaged specialist to evaluate certain of those inputs. The firm did not identify and test any controls over the completeness of certain reports and the accuracy and completeness of certain other reports used in the operation of these controls. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 5 | Long-Lived Assets | The firm's approach for substantively testing the valuation of long-lived assets was to test the issuer's process. With respect to the inputs methods and assumptions used in the issuer's VIU and depreciation and amortization rate calculations for one of its segments the following additional deficiency was identified: · The firm did not identify and test any controls over the (1) accuracy and completeness of certain issuer-produced data (2) reasonableness of certain assumptions and (3) appropriateness of the methods used by the (1) company-employed specialist to develop certain inputs and (2) company-engaged specialist to evaluate certain of those inputs. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 6 | Long-Lived Assets | The firm's approach for substantively testing the valuation of long-lived assets was to test the issuer's process. With respect to the inputs methods and assumptions used in the issuer's VIU and depreciation and amortization rate calculations for one of its segments the following additional deficiency was identified: · The firm did not perform procedures beyond inquiry of management to evaluate the appropriateness of an input including taking into consideration the issuer's ability to carry out its stated intentions. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 | |
| 7 | Long-Lived Assets | The firm's approach for substantively testing the valuation of long-lived assets was to test the issuer's process. With respect to the inputs methods and assumptions used in the issuer's VIU and depreciation and amortization rate calculations for one of its segments the following additional deficiency was identified: · The firm did not test the accuracy and completeness of certain issuer-produced data used by the (1) company-employed specialist to develop certain inputs and (2) company-engaged specialist to evaluate certain of those inputs. (AS 1105.A8a) Both financial statement and ICFR audits | AS 1105.A8a | |
| 8 | Long-Lived Assets | The firm's approach for substantively testing the valuation of long-lived assets was to test the issuer's process. With respect to the inputs methods and assumptions used in the issuer's VIU and depreciation and amortization rate calculations for one of its segments the following additional deficiency was identified: · The firm did not perform any procedures to evaluate the reasonableness of significant assumptions used by the (1) company-employed specialist to develop certain inputs and (2) company-engaged specialist to evaluate certain of those inputs. (AS 2501.16; AS 1105.A8b) Both financial statement and ICFR audits | AS 1105.A8b; AS 2501.16 | |
| 9 | Long-Lived Assets | The firm's approach for substantively testing the valuation of long-lived assets was to test the issuer's process. With respect to the inputs methods and assumptions used in the issuer's VIU and depreciation and amortization rate calculations for one of its segments the following additional deficiency was identified: · The firm did not evaluate whether the methods used by the (1) company-employed specialist to develop certain inputs and (2) company-engaged specialist to evaluate certain of those inputs were appropriate under the circumstances taking into consideration the requirements of IFRS. (AS 1105.A8c) Both financial statement and ICFR audits | AS 1105.A8c | |
| 10 | Revenue | The issuer recognized certain revenue upon delivery of the sold product to the customer. Pursuant to the customer contracts the quantity of products sold and delivered was measured using measuring equipment at the issuer's locations. The following deficiency was identified: · The firm selected for testing a control that consisted of the issuer's evaluation of the equipment used to measure inventory quantity on hand and inventory quantity delivered to each customer to determine whether it was appropriately maintained and operating correctly. The firm did not evaluate the specific review procedures that the control owners performed to determine whether the equipment was accurately measuring the quantity of products delivered to each customer. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 11 | Revenue | The issuer recognized certain revenue upon delivery of the sold product to the customer. Pursuant to the customer contracts the quantity of products sold and delivered was measured using measuring equipment at the issuer's locations. The following deficiency was identified: · The firm selected for testing another control that consisted of management's review of the reconciliation of the quantity of products sold in the revenue system to the quantity of products delivered in the issuer's inventory management system. The firm did not identify and test any controls over the accuracy and completeness of the system-generated reports used in the operation of this control. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 12 | Revenue | The sample sizes the firm used in certain of its substantive procedures to test revenue were too small to provide sufficient appropriate audit evidence because these procedures were designed based on a level of control reliance that was not supported due to the deficiencies in the firm's control testing discussed above. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A) Both financial statement and ICFR audits | AS 2301.16; AS 2301.18; AS 2301.37; AS 2315.19; AS 2315.23; AS 2315.23A |