- Inspection year
- 2023
- Report date
- 16-Nov-2023
- PCAOB release
- 104-2024-013
- 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
- 3
- 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 | Revenue | The firm did not perform any procedures to test or test any controls over the accuracy and completeness of certain data it used in substantively testing revenue. (AS 1105.10) Financial statement audit only | AS 1105.10 | |
| 2 | Equity-Method Investments | The issuer held equity-method investments with various investees. During the year the majority shareholder of one of the investees created a new entity in which the issuer also acquired a percentage of ownership. The issuer prepared a qualitative assessment of impairment of the investee and the related new entity. As part of the qualitative assessment the issuer engaged a valuation specialist to calculate the values of the investment and related new entity. The following deficiencies were identified: · The firm did not evaluate how the issuer considered contrary evidence included in the firm's work papers in reaching its conclusion in the qualitative assessment. (AS 2301.08; AS 2810.03) Financial statement audit only | AS 2301.8; AS 2810.3 | |
| 3 | Equity-Method Investments | The issuer held equity-method investments with various investees. During the year the majority shareholder of one of the investees created a new entity in which the issuer also acquired a percentage of ownership. The issuer prepared a qualitative assessment of impairment of the investee and the related new entity. As part of the qualitative assessment the issuer engaged a valuation specialist to calculate the values of the investment and related new entity. The following deficiencies were identified: · The firm did not evaluate the reliability of information from an external source that the issuer used in the qualitative assessment. (AS 1105.04 and .06) Financial statement audit only | AS 1105.4; AS 1105.6 | |
| 4 | Equity-Method Investments | The issuer held equity-method investments with various investees. During the year the majority shareholder of one of the investees created a new entity in which the issuer also acquired a percentage of ownership. The issuer prepared a qualitative assessment of impairment of the investee and the related new entity. As part of the qualitative assessment the issuer engaged a valuation specialist to calculate the values of the investment and related new entity. The following deficiencies were identified: · The firm did not perform procedures beyond obtaining and reading the company's specialist report to test the valuation of the investment and related new entity. Further the firm did not perform procedures with respect to its use of the work of the company's specialist as audit evidence. (AS 1105.A1 - .A10; AS 2501.07) Financial statement audit only | AS 1105.A1; AS 1105.A10; AS 1105.A2; AS 1105.A3; AS 1105.A4; AS 1105.A5; AS 1105.A6; AS 1105.A7; AS 1105.A8; AS 1105.A9; AS 2501.7 | |
| 5 | Equity-Method Investments | The issuer held equity-method investments with various investees. During the year the majority shareholder of one of the investees created a new entity in which the issuer also acquired a percentage of ownership. The following deficiency was identified related to the firm's testing of the investment and the related new entity: · The issuer reported the valuation of the investee and new entity based on investee financial results including unaudited financial statements. The firm did not evaluate whether the differences between the issuer's carrying amount of its investment in the investee and new entity and the issuer's underlying equity in the net assets of the investee and the new entity were in conformity with FASB ASC Topic 323 Investments-Equity Method and Joint Ventures. (AS 1105.B4) Financial statement audit only | AS 1105.B4 | |
| 6 | Equity-Method Investments | The issuer held equity-method investments with various investees. During the year the majority shareholder of one of the investees created a new entity in which the issuer also acquired a percentage of ownership. The following deficiency was identified related to the firm's testing of the investment and the related new entity: · The firm did not identify and evaluate departures from GAAP related to the issuer's omission of disclosures required by FASB ASC Topic 323 and 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 | |
| 7 | Equity-Method Investments | The issuer held equity-method investments with various investees. During the year the majority shareholder of one of the investees created a new entity in which the issuer also acquired a percentage of ownership. The following deficiency was identified related to the firm's testing of the investment and the related new entity: · The firm did not evaluate the business purpose (or lack thereof) of the transaction to create the new entity including whether it may have been entered into to engage in fraudulent financial reporting or conceal misappropriation of assets given certain facts regarding the transaction. (AS 2401.67) Financial statement audit only | AS 2401.67 |