- Inspection year
- 2022
- Report date
- 26-Oct-2023
- PCAOB release
- 104-2023-196
- Audits reviewed
- 4
- Audits w/ Part I.A deficiencies
- 2
- Part I.A deficiency rate
- 50%
- Part I.A deficiencies
- 22
- Part I.B deficiencies
- 3
- Report
- View PDF ↗
Deficiencies (22)
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 issuer used an information technology (IT) system to process certain transactions related to revenue. In its testing of controls over revenue the firm tested various automated and IT-dependent manual controls that used data and reports generated or maintained by this IT system. As a result of the following deficiencies in the firm's testing of IT general controls (ITGCs) 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 | Revenue | With respect to user access: · The firm selected for testing a control that consisted of the annual review of user access. The firm did not identify and test any controls over the completeness of the user access listing used in the operation of the control. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 3 | Revenue | With respect to user access: · The firm selected for testing a control that consisted of the annual review of user access. The firm did not test an aspect of the control related to the role and functions assigned to users. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 4 | Revenue | With respect to user access: · The firm selected for testing another control that consisted of the review of new and modified user access tickets. The firm did not perform sufficient procedures to test the completeness of the user access list from which it made its selections to test this control because it did not (1) evaluate whether the user access list was a customizable report and (2) test any customization used to generate the user access list. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 5 | Revenue | The firm selected for testing a control that consisted of the issuer's review of new and modified contracts for appropriate revenue recognition. The firm did not evaluate the specific review procedures that the control owners performed to assess the appropriateness of (1) the performance obligations identified and (2) the standalone selling price used to allocate revenue to separate performance obligations. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 6 | Revenue | The firm did not perform any substantive procedures to (1) evaluate the reasonableness of the performance obligations identified and (2) test the standalone selling price used to allocate revenue to separate performance obligations. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 |
Issuer B16 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Accounts Receivable | A component of the issuer (“component”) entered into contracts with customers in which revenue was recognized over time based on the extent of progress towards completion of the performance obligation. The following deficiency was identified: · The firm selected for testing two controls that consisted of the component's review of contracts including the review of new and modified contracts for appropriate revenue recognition. For one control the firm did not identify and test any controls over the completeness of the new and modified contract data used in the operation of the control. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 2 | Accounts Receivable | A component of the issuer (“component”) entered into contracts with customers in which revenue was recognized over time based on the extent of progress towards completion of the performance obligation. The following deficiency was identified: · The firm selected for testing two controls that consisted of the component's review of contracts including the review of new and modified contracts for appropriate revenue recognition. The firm did not (1) evaluate the specific review procedures that the control owner performed to assess the appropriateness of revenue recognition and (2) test an aspect of the control over the accuracy of the report used in the operation of the control. (AS 2201.42 and .44)) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 3 | Accounts Receivable | A component of the issuer (“component”) entered into contracts with customers in which revenue was recognized over time based on the extent of progress towards completion of the performance obligation. The following deficiency was identified: · The firm selected for testing two controls that consisted of the component's review of contracts including the review of new and modified contracts for appropriate revenue recognition. For the other control the firm did not test or test any controls over the completeness of the contract listing from which it made its selections to test the control. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 4 | Accounts Receivable | A component of the issuer (“component”) entered into contracts with customers in which revenue was recognized over time based on the extent of progress towards completion of the performance obligation. The following deficiency was identified: · The firm selected for testing a control that consisted of the component's review of invoices. The firm did not identify and test any controls over the accuracy and completeness of certain data used in the operation of the control. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 5 | Accounts Receivable | A component of the issuer (“component”) entered into contracts with customers in which revenue was recognized over time based on the extent of progress towards completion of the performance obligation. The following deficiency was identified: · The firm selected for testing a control that consisted of the component's review of manual journal entries. The firm did not sufficiently test the operating effectiveness of this control because it made its selections to test the control from an incomplete population of journal entries. (AS 2201.44) Both financial statement and ICFR audits | AS 2201.44 | |
| 6 | Accounts Receivable | A component of the issuer (“component”) entered into contracts with customers in which revenue was recognized over time based on the extent of progress towards completion of the performance obligation. The following deficiency was identified: · The firm selected for testing a control that consisted of the component's review of manual journal entries. The firm did not identify and test any controls over the component's recording of the manual journal entries in the general ledger. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 7 | Accounts Receivable | A component of the issuer (“component”) entered into contracts with customers in which revenue was recognized over time based on the extent of progress towards completion of the performance obligation. The following deficiency was identified: · The firm selected for testing a control that consisted of the component's review of financial information. The firm did not evaluate the review procedures that the control owners performed to identify items for follow up. Further the firm did not sufficiently evaluate whether items identified for follow up were appropriately resolved because it limited its testing to one item. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 8 | Accounts Receivable | A component of the issuer (“component”) entered into contracts with customers in which revenue was recognized over time based on the extent of progress towards completion of the performance obligation. The following deficiency was identified: · The firm selected for testing a control that consisted of the component's review of gross receivables. The firm did not sufficiently test the operating effectiveness of the control because it did not test an aspect of the control related to certain receivables. (AS 2201.44) Both financial statement and ICFR audits | AS 2201.44 | |
| 9 | Accounts Receivable | A component of the issuer (“component”) entered into contracts with customers in which revenue was recognized over time based on the extent of progress towards completion of the performance obligation. The following deficiency was identified: · The firm selected for testing a control that consisted of the component's review of gross receivables. The firm did not identify and test any controls over the accuracy and completeness of certain data used in the operation of the control. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 10 | Accounts Receivable | A component of the issuer (“component”) entered into contracts with customers in which revenue was recognized over time based on the extent of progress towards completion of the performance obligation. The following deficiency was identified: · The firm did not perform any substantive procedures to evaluate the appropriateness of certain revenue recognized for new and modified customer contracts. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 | |
| 11 | Accounts Receivable | A component of the issuer (“component”) entered into contracts with customers in which revenue was recognized over time based on the extent of progress towards completion of the performance obligation. The following deficiency was identified: · The firm's approach for substantively testing certain revenue consisted primarily of performing a software-assisted analysis to test the relationships among revenue accounts receivable and cash receipts. The firm did not perform any substantive procedures to test the underlying revenue transactions for revenue with no relationship to accounts receivable. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 | |
| 12 | Accounts Receivable | A component of the issuer (“component”) entered into contracts with customers in which revenue was recognized over time based on the extent of progress towards completion of the performance obligation. The following deficiency was identified: · The firm did not perform any substantive procedures to test certain revenue. (AS 2301.08 and .13) Both financial statement and ICFR audits | AS 2301.8; AS 2301.13 | |
| 13 | Accounts Receivable | A component of the issuer (“component”) entered into contracts with customers in which revenue was recognized over time based on the extent of progress towards completion of the performance obligation. The following deficiency was identified: · The firm used certain data to substantively test accounts receivable but did not test or (as discussed above) test controls over the accuracy and completeness of this data. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 14 | Accounts Receivable | A component of the issuer (“component”) entered into contracts with customers in which revenue was recognized over time based on the extent of progress towards completion of the performance obligation. The following deficiency was identified: · The sample size the firm used in certain of its substantive procedures to test accounts receivable was 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 | |
| 15 | Other Liabilities | The firm did not identify and test any controls over certain other liabilities for the component. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 16 | Other Liabilities | The firm did not perform any substantive procedures to test certain other liabilities. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 |