- Inspection year
- 2023
- Report date
- 26-Oct-2023
- PCAOB release
- 104-2023-201
- Audits reviewed
- 1
- Audits w/ Part I.A deficiencies
- 1
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 7
- Part I.B deficiencies
- 2
- 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 A7 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Related Party Transactions | The issuer converted preferred stock held by a related party into common stock subsequent to year end. The firm did not identify and evaluate a departure from GAAP related to the issuer recording the conversion of the preferred stock in the current year. (AS 2410.17; AS 2810.30 and 31) In connection with our review the issuer reevaluated its accounting for the conversion of preferred stock and concluded that a material misstatement existed that had not been previously identified. The issuer subsequently corrected this misstatement in a restatement of its financial statements and the firm revised and reissued its report on the financial statements. Financial statement audit only | AS 2410.17; AS 2810.30; AS 2810.31 | Incorrect opinion |
| 2 | Related Party Transactions | The firm did not perform any substantive procedures to test the disclosures related to the conversion terms of this preferred stock. (AS 2410.17) Financial statement audit only | AS 2410.17 | Incorrect opinion |
| 3 | Related Party Transactions | In connection with our review the issuer reevaluated its disclosure for this related party transaction and concluded that a material misstatement existed that had not been previously identified. The issuer subsequently corrected this misstatement in a restatement of its financial statements and the firm revised and reissued its report on the financial statements. The firm did not identify and evaluate a departure from GAAP related to the issuer's omission of required disclosure of a related party transaction in conformity with FASB ASC Topic 850 Related Party Disclosures. (AS 2410.17; AS 2810.30 and .31) Financial statement audit only | AS 2410.17; AS 2810.30; AS 2810.31 | Incorrect opinion |
| 4 | Related Party Transactions | The issuer issued common stock to related parties in exchange for certain services. The following deficiency was identified: · The firm did not evaluate the appropriateness of the issuer's determination of the grant date for the issuance of certain common stock. (AS 2410.17) Financial statement audit only | AS 2410.17 | Incorrect opinion |
| 5 | Related Party Transactions | The issuer issued common stock to related parties in exchange for certain services. The following deficiency was identified: · The firm did not evaluate whether the related compensation expense was recorded in the appropriate period at the appropriate amount. (AS 2410.17) Financial statement audit only | AS 2410.17 | Incorrect opinion |
| 6 | Related Party Transactions | The issuer issued common stock to related parties in exchange for certain services. The following deficiency was identified: · The firm did not perform procedures to test certain other stock-based compensation expense beyond obtaining approval of the issuance of the underlying common stock and testing the mathematical accuracy of the issuer's calculation of this expense. (AS 2410.12) Financial statement audit only | AS 2410.12 | Incorrect opinion |
| 7 | Related Party Transactions | The issuer settled all debts from prior related parties as part of a stock purchase agreement and recognized a gain on the forgiveness of these debts. The firm did not perform procedures to test this transaction beyond obtaining the executed stock purchase agreement and the journal entry. (AS 2410.12) Financial statement audit only | AS 2410.12 | Incorrect opinion |