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Ernst & Young AG
Switzerland · Ernst & Young Global Limited · Triennially Inspected
- Inspection year
- 2022
- Report date
- 26-Oct-2023
- PCAOB release
- 104-2024-001
- Audits reviewed
- 3
- Audits w/ Part I.A deficiencies
- 1
- Part I.A deficiency rate
- 33%
- Part I.A deficiencies
- 3
- Part I.B deficiencies
- 2
- Report
- View PDF ↗
Deficiencies (3)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The principal auditor instructed the firm to test a control that consisted of the issuer's quarterly review of the gross margin by product for certain revenue. 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 | |
| 2 | Revenue | The principal auditor instructed the firm to test a control that consisted of the issuer's quarterly review of the gross margin by product for certain revenue. The number of quarters selected for testing did not provide sufficient appropriate audit evidence because the firm did not test the number of quarters that it determined necessary. (AS 2201.46) Both financial statement and ICFR audits | AS 2201.46 | |
| 3 | Inventory | The firm's procedures to test the valuation of certain inventory included selecting a sample of inventory items for testing using a sampling approach that was based on obtaining a certain level of audit evidence from its other substantive procedures. The sample size the firm used was too small to provide sufficient appropriate audit evidence over this inventory because the firm's other substantive procedures did not provide the level of substantive evidence needed to support its sampling approach. (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 |