- Inspection year
- 2023
- Report date
- 11-Dec-2023
- PCAOB release
- 104-2024-020
- Audits reviewed
- 2
- Audits w/ Part I.A deficiencies
- 2
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 8
- Part I.B deficiencies
- 6
- Report
- View PDF ↗
Deficiencies (8)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A5 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Goodwill and Intangible Assets | The firm selected for testing a control over the review of goodwill and intangible assets for impairment. The firm did not evaluate the review procedures that the control owners performed to evaluate the reasonableness of certain assumptions the issuer used in its impairment analysis. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | Significant risk |
| 2 | Goodwill and Intangible Assets | The issuer engaged an external specialist to perform an impairment evaluation for certain goodwill and intangible assets as of year end. The firm's approach for substantively testing the goodwill and intangible assets impairment evaluation was to test the issuer's process. The following deficiencies were identified: · The firm did not perform any procedures to evaluate the relevance and reliability of certain external information it used in its substantive procedures. (AS 1105.04 and .06) Both financial statement and ICFR audits | AS 1105.4; AS 1105.6 | Significant risk |
| 3 | Goodwill and Intangible Assets | The issuer engaged an external specialist to perform an impairment evaluation for certain goodwill and intangible assets as of year end. The firm's approach for substantively testing the goodwill and intangible assets impairment evaluation was to test the issuer's process. The following deficiencies were identified: · The firm did not evaluate whether the issuer had a reasonable basis for certain significant assumptions related to revenue projections it developed that were used by the company's specialist including taking into account the issuer's intent and ability to carry out those projections. (AS 2501.16 and .17) Both financial statement and ICFR audits | AS 2501.16; AS 2501.17 | Significant risk |
| 4 | Goodwill and Intangible Assets | The issuer engaged an external specialist to perform an impairment evaluation for certain goodwill and intangible assets as of year end. The firm's approach for substantively testing the goodwill and intangible assets impairment evaluation was to test the issuer's process. The following deficiencies were identified: · The firm did not perform any procedures beyond inquiry to evaluate the reasonableness of certain other significant assumptions the issuer developed that were used by the company's specialist. (AS 2501.16) Both financial statement and ICFR audits | AS 2501.16 | Significant risk |
| 5 | Evaluating Control Deficiencies | The firm identified control deficiencies during its testing of internal controls. The firm did not evaluate the severity of certain of these control deficiencies to determine whether the deficiencies individually or in combination with other deficiencies constituted a material weakness. (AS 2201.62) Both financial statement and ICFR audits | AS 2201.62 |
Issuer B3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | To substantively test revenue the firm selected revenue transactions for testing that exceeded a monetary threshold. The firm did not perform sufficient procedures to test the remaining population of revenue transactions as its testing was limited to comparing prior year revenues to current year amounts. (AS 1105.27; AS 2301.08 and .13) Both financial statement and ICFR audits | AS 1105.27; AS 2301.8; AS 2301.13 | |
| 2 | Journal Entries | The firm selected for testing a control that consisted of the review of journal entries. The firm did not evaluate the specific review procedures that the control owner performed to assess (1) the appropriateness of the journal entries and (2) whether the journal entries had been approved in accordance with the issuer's process to support appropriate segregation of duties related to journal entry initiation review and posting. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 3 | Journal Entries | The firm identified characteristics of potentially fraudulent entries or adjustments for testing. However the firm did not determine whether any journal entries met those characteristics and instead limited its testing to haphazardly selected journal entries. (AS 2401.61) Both financial statement and ICFR audits | AS 2401.61 |