- Inspection year
- 2022
- Report date
- 21-Dec-2023
- PCAOB release
- 104-2024-030
- Audits reviewed
- 2
- Audits w/ Part I.A deficiencies
- 2
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 18
- Part I.B deficiencies
- 11
- Report
- View PDF ↗
Deficiencies (18)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A13 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm did not perform sufficient procedures to test certain revenue because it did not evaluate whether (i) the agreement was a modification to an existing contract or whether it was appropriate to account for it as a separate contract and (ii) certain payments received from an external party represented consideration payable to a customer. Further the firm did not sufficiently evaluate whether the timing of revenue recognition was appropriate because it did not evaluate certain information that indicated the issuer (i) may not be entitled to any consideration and (ii) had not satisfied the performance obligation. (AS 2301.08 and .13; AS 2810.03) Financial statement audit only | AS 2301.8; AS 2301.13; AS 2810.3 | |
| 2 | Revenue | The firm selected a sample of transactions to test certain other revenue. The firm did not perform any substantive procedures to test the transfer of control for these transactions. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 3 | Revenue | The firm did not evaluate the business purpose (or lack thereof) of certain revenue and revenue-related transactions including whether they may have been entered into to engage in fraudulent financial reporting or conceal misappropriation of assets given certain facts regarding the transactions. (AS 2401.67) Financial statement audit only | AS 2401.67 | |
| 4 | Long-Lived Assets | The firm did not identify and evaluate a departure from GAAP related to the issuer's incorrect presentation of an asset as a long-lived asset on the balance sheet. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 | Significant risk |
| 5 | Long-Lived Assets | For certain long-lived assets the firm did not perform any procedures to evaluate whether the assets were impaired. (AS 2301.08 and .11) Financial statement audit only | AS 2301.8; AS 2301.11 | Significant risk |
| 6 | Long-Lived Assets | For certain other long-lived assets the firm did not perform sufficient procedures to evaluate whether there were impairment indicators because it limited its procedures to inquiry of management and using market data without evaluating the relevance and reliability of this data. Further the firm did not perform any procedures to address contrary evidence of which it was aware. (AS 2301.08 and .11; AS 1105.04 and .06; AS 2810.03) Financial statement audit only | AS 1105.4; AS 1105.6; AS 2301.8; AS 2301.11; AS 2810.3 | Significant risk |
| 7 | Long-Lived Assets | The issuer engaged an external specialist to assist in the valuation of certain other long-lived assets. The following deficiencies were identified: · The firm did not evaluate the reasonableness of certain significant assumptions developed by the company's specialist. (AS 1105.A8b) Financial statement audit only | AS 1105.A8b | Significant risk |
| 8 | Long-Lived Assets | The issuer engaged an external specialist to assist in the valuation of certain other long-lived assets. The following deficiencies were identified: · The firm did not sufficiently evaluate the reasonableness of another significant assumption because it limited its procedures to comparing the assumption to various external information. Further the firm did not evaluate the relevance and reliability of the information. (AS 1105.04 .06 and .A8b) Financial statement audit only | AS 1105.4; AS 1105.6; AS 1105.A8b | Significant risk |
| 9 | Long-Lived Assets | The issuer engaged an external specialist to assist in the valuation of certain other long-lived assets. The following deficiencies were identified: · The firm did not test the accuracy and completeness of the data provided by the issuer to the specialist beyond comparing the data to other issuer provided information. (AS 1105.A8a) Financial statement audit only | AS 1105.A8a | Significant risk |
| 10 | Long-Lived Assets | The issuer engaged an external specialist to assist in the valuation of certain other long-lived assets. The following deficiencies were identified: · The firm did not perform procedures to evaluate the relevance and reliability of the company's specialist valuation report and whether the specialist's findings support or contradict the valuation of certain long-lived assets because it did not identify and evaluate that the valuation report was prepared to assess valuation at a date other than year end. (AS 1105.A9) Financial statement audit only | AS 1105.A9 | Significant risk |
| 11 | Long-Lived Assets | The firm did not identify and evaluate a departure from GAAP related to the issuer's inaccurate disclosure related to the accounting for and presentation and disclosure of impairment. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 | Significant risk |
| 12 | Long-Lived Assets | The issuer capitalized interest related to certain projects. The firm did not identify and evaluate departures from GAAP related to the issuer's capitalization of interest for one project that was substantially complete and ready for its intended use and for another project for which activities necessary to get the asset ready for its intended use were not in progress in accordance with FASB ASC Topic 835 Interest. (AS 2810.30) Financial statement audit only | AS 2810.30 | Significant risk |
| 13 | Significant Disclosure | The firm did not perform any procedures to test a significant disclosure. (AS 2301.08) Financial statement audit only | AS 2301.8 |
Issuer B5 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm did not perform sufficient procedures to test certain revenue because the firm did not evaluate (i) whether the sales contracts included multiple performance obligations and (ii) whether revenue was recognized after the point in time at which control was transferred to the customer. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 2 | Revenue | The firm did not perform any procedures to evaluate whether the issuer's sales contracts met the criteria for application of the practical expedient relating to the remaining performance obligations disclosure. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 3 | Investments | The issuer held a majority ownership in a limited partnership and reported the valuation of this investment based on investee financial results including audited financial statements that were prepared using different accounting principles. The following deficiencies were identified: · The firm did not evaluate whether the issuer's accounting for this investment was appropriate. (AS 2301.08 and .11) Financial statement audit only | AS 2301.8; AS 2301.11 | Significant risk |
| 4 | Investments | The issuer held a majority ownership in a limited partnership and reported the valuation of this investment based on investee financial results including audited financial statements that were prepared using different accounting principles. The following deficiencies were identified: · The firm did not obtain sufficient appropriate audit evidence for the investee's financial statements prepared using different accounting principles because it did not perform procedures to obtain evidence related to significant differences in accounting principles. (AS 1105.B1 and .B2) Financial statement audit only | AS 1105.B1; AS 1105.B2 | Significant risk |
| 5 | Investments | The issuer held a majority ownership in a limited partnership and reported the valuation of this investment based on investee financial results including audited financial statements that were prepared using different accounting principles. The following deficiencies were identified: · The firm did not identify and evaluate departures from GAAP related to this investment. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 | Significant risk |