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Deloitte & Touche LLP
United States · Deloitte Touche Tohmatsu Limited · Annually Inspected
- Inspection year
- 2022
- Report date
- 07-Nov-2023
- PCAOB release
- 104-2024-032
- Audits reviewed
- 53
- Audits w/ Part I.A deficiencies
- 9
- Part I.A deficiency rate
- 17%
- Part I.A deficiencies
- 16
- Part I.B deficiencies
- 6
- Report
- View PDF ↗
Deficiencies (16)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer recognized revenue from a customer contract over time based on costs incurred to date relative to total estimated costs to complete the contract. The issuer used forecasted labor hours in determining the estimated costs to complete the contract. The following deficiencies were identified: · The firm selected for testing a control that included the issuer's reviews of the forecasted labor hours. The firm did not evaluate the specific review procedures that the control owners performed to assess the reasonableness of the total forecasted labor hours. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | Significant risk |
| 2 | Revenue | The issuer recognized revenue from a customer contract over time based on costs incurred to date relative to total estimated costs to complete the contract. The issuer used forecasted labor hours in determining the estimated costs to complete the contract. The following deficiencies were identified: · The firm did not sufficiently test the estimated costs to complete the contract because it did not perform any substantive procedures beyond inquiring of issuer personnel to test the total forecasted labor hours. (AS 2501.07) Both financial statement and ICFR audits | AS 2501.7 | Significant risk |
Issuer B2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Inventory | The issuer performed cycle counts of certain inventory held at various locations. The firm selected for testing a control that included the issuer's reviews of the cycle-count results. The firm did not identify and test any controls over the accuracy and completeness of certain reports that the control owners used in the operation of this control. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 2 | Inventory | Due to the deficiency discussed above the firm did not obtain sufficient appropriate audit evidence that the cycle-count procedures the issuer used for this inventory were sufficiently reliable to produce results substantially the same as those that would have been obtained by a count of all items each year. (AS 2510.11) Both financial statement and ICFR audits | AS 2510.11 |
Issuer C2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Long-Lived Assets | The firm did not identify and test any controls over the capitalization of interest costs associated with the construction of certain long-lived assets. (AS 2201.39) Unrelated to our review the issuer reevaluated its controls over the capitalization of these interest costs and concluded that a material weakness existed that had not been previously identified. The issuer subsequently revised its report on ICFR to reflect this material weakness and the firm modified its opinion on the effectiveness of the issuer's ICFR to express an adverse opinion and reissued its report. Both financial statement and ICFR audits | AS 2201.39 | |
| 2 | Long-Lived Assets | The firm did not perform any substantive procedures to test the capitalization of interest costs associated with the construction of certain long-lived assets. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 |
Issuer D2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Long-Lived Assets and Depreciation Expense | The firm did not identify and test any controls over long-lived assets and depreciation expense. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 2 | Long-Lived Assets and Depreciation Expense | The firm did not perform any substantive procedures to test long-lived assets and depreciation expense. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 |
Issuer E2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Variable Interest Entities | The issuer held investments in multiple entities and determined that certain of these were variable interest entities (VIEs). The following deficiencies were identified: · The firm did not identify and test any controls related to the issuer's evaluation of whether these VIEs should be consolidated. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 2 | Variable Interest Entities | The issuer held investments in multiple entities and determined that certain of these were variable interest entities (VIEs). The following deficiencies were identified: · The firm did not perform any substantive procedures beyond reading certain agreements and inquiring of management to evaluate whether these VIEs should be consolidated. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 |
Issuer F2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Long-Lived Assets | During the year the issuer identified events indicating that the carrying value of its long-lived assets may not be recoverable and performed an impairment analysis. The following deficiencies were identified: · The firm did not identify and test any controls related to the issuer's evaluation of long-lived assets for possible impairment. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 2 | Long-Lived Assets | During the year the issuer identified events indicating that the carrying value of its long-lived assets may not be recoverable and performed an impairment analysis. The following deficiencies were identified: · The firm did not perform any substantive procedures to test long-lived assets for possible impairment. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 |
Issuer G2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm did not perform any substantive procedures to test certain revenue. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 2 | Revenue | The firm's substantive procedures to test certain other revenue consisted of performing substantive analytical procedures. The firm did not accurately calculate its expected revenue and the recorded revenue amounts used in these analytical procedures. Further the threshold that the firm established to investigate differences was too high to identify misstatements that could be material either individually or in the aggregate. (AS 2305.16 and .20) Financial statement audit only | AS 2305.16; AS 2305.20 |
Issuer H1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm's internal inspection program inspected this audit and reviewed this area but did not identify the deficiency below. The firm's approach for substantively testing revenue consisted primarily of performing a software-assisted analysis to test the relationships among revenue accounts receivable and cash receipts. The reliability of the audit evidence obtained from this analysis was dependent upon the firm's testing of the underlying data. The firm did not sufficiently test the accuracy of the underlying data because the firm did not (1) identify and test any controls or (2) inspect any supporting documentation or perform other procedures to evaluate the appropriateness of the data. (AS 1105.10) Financial statement audit only | AS 1105.10 |
Issuer I1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Significant Transactions | During the year the issuer entered into a significant transaction. In connection with this transaction the issuer terminated a previous arrangement and as a result recognized a loss. The firm did not evaluate the reasonableness of a significant assumption the issuer used to estimate the loss that it recognized. (AS 2501.16) Financial statement audit only | AS 2501.16 |