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Grant Thornton LLP
United States · Grant Thornton International Limited · Annually Inspected
- Inspection year
- 2022
- Report date
- 08-Dec-2023
- PCAOB release
- 104-2024-034
- Audits reviewed
- 26
- Audits w/ Part I.A deficiencies
- 8
- Part I.A deficiency rate
- 31%
- Part I.A deficiencies
- 44
- Part I.B deficiencies
- 14
- Report
- View PDF ↗
Deficiencies (44)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A9 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Leases | The firm did not identify and test any controls that addressed the valuation of certain right-of-use assets. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 2 | Leases | The firm did not perform any substantive procedures to test the valuation of these right-of-use assets. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 | |
| 3 | Leases | During the year the issuer entered into various lease transactions. The firm did not identify and evaluate the issuer's omission of certain disclosures related to these transactions that were required under FASB ASC Topic 842 Leases. (AS 2810.30 and .31) Both financial statement and ICFR audits | AS 2810.30; AS 2810.31 | |
| 4 | Goodwill | The firm did not identify and test any controls over the issuer's determination of the reporting units that it used in its annual goodwill impairment analysis. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 5 | Goodwill | The firm did not perform any substantive procedures to evaluate the appropriateness of the issuer's determination of the reporting units used in its goodwill impairment analysis. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 | |
| 6 | Goodwill | The firm selected for testing two controls that included the issuer's review of the valuation methods and the underlying assumptions used in its goodwill impairment analysis. The firm did not evaluate the specific review procedures that the control owner performed to evaluate the appropriateness of the valuation methods and the reasonableness of the underlying assumptions. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 7 | Goodwill | The firm selected for testing two controls that included the issuer's review of the valuation methods and the underlying assumptions used in its goodwill impairment analysis. The firm did not identify and test any controls over the accuracy and completeness of certain information used in the operation of these controls. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 8 | Going Concern | The firm selected for testing a control that consisted of the issuer's review of its analysis to evaluate its ability to continue as a going concern. 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 | |
| 9 | Going Concern | The issuer used forecasted financial information to assess its ability to comply with a contractual debt covenant as part of its evaluation of its ability to continue as a going concern. The firm did not evaluate the reliability of this information. (AS 1105.04 and .06) Both financial statement and ICFR audits | AS 1105.4; AS 1105.6 |
Issuer B9 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer's contracts with customers included standard and nonstandard terms. The firm's substantive procedures included an evaluation of the terms for a sample of the issuer's contracts with customers. The firm did not evaluate the nonstandard contract terms included in these contracts and whether these terms could have had an effect on revenue recognition. (AS 2301.08 and. 13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 2 | Revenue | The issuer recognized revenue based on inputs that included billing rates and labor hours incurred. The firm used certain labor hour information in its substantive testing of revenue. The firm did not perform any procedures to test or test any controls over the accuracy and completeness of this information. (AS 1105.10) Financial statement audit only | AS 1105.10 | |
| 3 | Revenue | The issuer recognized revenue based on inputs that included billing rates and labor hours incurred. The firm used certain labor hour information in its substantive testing of revenue. For certain revenue the firm did not perform any procedures to test the billing rates that the issuer used to record revenue. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 4 | Revenue | The issuer recognized certain of its revenue from contracts based on its estimated progress toward complete satisfaction of its performance obligations. The firm selected for testing a sample of these contracts but it did not perform any substantive procedures to test the issuer's estimated progress. (AS 2501.07) Financial statement audit only | AS 2501.7 | |
| 5 | Revenue | The firm did not perform any procedures to test certain of the issuer's revenue disclosures. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 6 | Revenue | The firm did not identify and evaluate the issuer's omission of a disclosure that was required under FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 | |
| 7 | Business Combinations | During the year the issuer acquired multiple businesses. The following deficiencies were identified: · The issuer developed forecasted cash flows using historical financial data from the acquired businesses to determine the fair values of certain acquired intangible assets and assumed liabilities. The firm did not perform any procedures to evaluate the reliability of the historical financial data beyond tracing this data to unaudited financial information. (AS 1105.04 and .06) Financial statement audit only | AS 1105.4; AS 1105.6 | |
| 8 | Business Combinations | During the year the issuer acquired multiple businesses. The following deficiencies were identified: · The issuer developed forecasted cash flows using historical financial data from the acquired businesses to determine the fair values of certain acquired intangible assets and assumed liabilities. The firm did not perform any procedures to evaluate the reasonableness of certain significant assumptions that the issuer used to develop the forecasted cash flows. (AS 2501.16) Financial statement audit only | AS 2501.16 | |
| 9 | Business Combinations | During the year the issuer acquired multiple businesses. The following deficiencies were identified: · The firm did not identify and evaluate the issuer's omission of certain disclosures that were required under FASB ASC Topic 805 Business Combinations. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 |
Issuer C8 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | For two business units the firm selected for testing two controls that included the issuer's review of the accuracy of pricing information used to record revenue. The firm did not identify and test any controls over the accuracy and completeness of certain pricing information that the control owners used in the operation of these controls. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 2 | Revenue | For a third business unit the firm identified a control deficiency related to the issuer's review of the accuracy of pricing information used to record revenue. For a fourth business unit the firm identified a significant deficiency related to change management over an information-technology (IT) system that the issuer used to manage customer pricing and process revenue transactions. The firm identified and tested a compensating control that it believed mitigated these deficiencies but did not identify that this control was not designed to address the risks of material misstatement related to inaccurate pricing information and inappropriate changes made to the issuer's IT system. (AS 2201.68) Both financial statement and ICFR audits | AS 2201.68 | |
| 3 | Revenue | The sample sizes the firm used in its substantive procedures to test revenue for three of the business units discussed above were too small to provide sufficient appropriate audit evidence because these procedures were designed based on a level of control reliance that was not supported due to the deficiencies in the firm's control testing discussed above. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A) Both financial statement and ICFR audits | AS 2301.16; AS 2301.18; AS 2301.37; AS 2315.19; AS 2315.23; AS 2315.23A | |
| 4 | Revenue | With respect to revenue for certain other business units that the firm subjected to less extensive audit procedures the following deficiencies were identified: · In determining the extent to which audit procedures should be performed the firm did not evaluate (1) the materiality of these business units and (2) whether the risks of material misstatement including a fraud risk related to certain revenue that the firm identified for the business units subject to more extensive audit procedures also applied to these business units. (AS 2101.11 and .12) Both financial statement and ICFR audits | AS 2101.11; AS 2101.12 | |
| 5 | Revenue | With respect to revenue for certain other business units that the firm subjected to less extensive audit procedures the following deficiencies were identified: · The firm did not perform any substantive procedures to test revenue for these business units (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 | |
| 6 | Revenue | With respect to revenue for certain other business units that the firm subjected to less extensive audit procedures the following deficiencies were identified: · The firm did not identify and test any controls over the issuer's revenue for certain of these business units. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 7 | Revenue | With respect to revenue for certain other business units that the firm subjected to less extensive audit procedures the following deficiencies were identified: · For the remainder of these business units the firm selected for testing a control that consisted of the issuer's reconciliation of revenue recorded to cash receipts. The firm did not evaluate the specific review procedures that the control owners performed to evaluate exceptions identified during the operation of the control. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 8 | Revenue | With respect to revenue for certain other business units that the firm subjected to less extensive audit procedures the following deficiencies were identified: · For the remainder of these business units the firm selected for testing a control that consisted of the issuer's reconciliation of revenue recorded to cash receipts. The firm did not identify that this control was not designed to address revenue for which payment had not been collected by the issuer. (AS 2201.42) Both financial statement and ICFR audits | AS 2201.42 |
Issuer D6 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer recognized certain of its revenue from customer contracts based on costs incurred to date relative to total estimated costs to complete these contracts. The issuer used certain significant assumptions to estimate the costs to complete these contracts. The following deficiencies were identified: · The firm selected for testing certain controls that included reviews of the total estimated costs to complete these contracts. The firm did not evaluate the specific review procedures that the control owners performed to assess the reasonableness of the significant assumptions used to estimate the total costs to complete the contracts. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 2 | Revenue | The issuer recognized certain of its revenue from customer contracts based on costs incurred to date relative to total estimated costs to complete these contracts. The issuer used certain significant assumptions to estimate the costs to complete these contracts. The following deficiencies were identified: · The firm did not perform any substantive procedures to evaluate the reasonableness of these significant assumptions. (AS 2501.16) Both financial statement and ICFR audits | AS 2501.16 | |
| 3 | Revenue | With respect to the issuer's disclosures related to revenue the following deficiencies were identified: · The firm selected for testing certain controls that included a review of the issuer's revenue disclosures. The firm did not evaluate the specific review procedures that the control owner performed to evaluate whether these disclosures were presented in conformity with GAAP. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 4 | Revenue | With respect to the issuer's disclosures related to revenue the following deficiencies were identified: · The firm did not identify and evaluate the issuer's omission of certain revenue disclosures that were required under FASB ASC Topic 606. (AS 2810.30 and .31) Both financial statement and ICFR audits | AS 2810.30; AS 2810.31 | |
| 5 | Revenue | With respect to the issuer's disclosures related to revenue the following deficiencies were identified: · The firm did not evaluate the significance of the issuer's omission of another required revenue disclosure that the firm identified through its substantive procedures. (AS 2810.30 and .31) Both financial statement and ICFR audits | AS 2810.30; AS 2810.31 | |
| 6 | Revenue | With respect to the issuer's disclosures related to revenue the following deficiencies were identified: · The firm identified a misstatement in a required disclosure under FASB ASC Topic 606 related to the issuer's remaining performance obligations. The firm did not appropriately evaluate whether this uncorrected misstatement was material because the firm understated its projected misstatement. (AS 2810.17) Both financial statement and ICFR audits | AS 2810.17 |
Issuer E4 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Inventory | The firm subjected certain of the issuer's business units to less extensive audit procedures. With respect to revenue and inventory for these business units the following deficiencies were identified: · In determining the extent to which audit procedures should be performed the firm did not evaluate (1) the materiality of these business units and (2) whether the risks of material misstatement including a fraud risk related to certain revenue that the firm identified for the business units subject to more extensive audit procedures also applied to these business units. (AS 2101.11 and .12) Both financial statement and ICFR audits | AS 2101.11; AS 2101.12 | |
| 2 | Inventory | The firm subjected certain of the issuer's business units to less extensive audit procedures. With respect to revenue and inventory for these business units the following deficiencies were identified: · To address the risks of material misstatement related to revenue and inventory for these business units the firm selected for testing two controls (“budget controls”) that consisted of the issuer's (1) review and approval of its business unit and consolidated budgets and (2) comparison of the business unit budgets to actual results. 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 | |
| 3 | Inventory | The firm subjected certain of the issuer's business units to less extensive audit procedures. With respect to revenue and inventory for these business units the following deficiencies were identified: · The firm did not perform any substantive procedures to test revenue and inventory for these business units. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 | |
| 4 | Inventory | The firm identified significant deficiencies related to certain IT systems that the issuer used to record revenue and inventory transactions for two of the issuer's business units that were subject to more extensive audit procedures. The firm identified the budget controls as compensating controls that it believed would mitigate these deficiencies identified but did not sufficiently test these controls. (AS 2201.68) Both financial statement and ICFR audits | AS 2201.68 |
Issuer F3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer recognized revenue based on contracts with customers that included standard and nonstandard terms. The firm did not identify and test any controls over the issuer's identification and evaluation of contract terms other than pricing that could affect revenue recognition. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 2 | Revenue | The firm's substantive procedures included an evaluation of the terms for a sample of the issuer's contracts with customers. The firm did not evaluate the nonstandard contract terms included in these contracts and whether these terms could have had an effect on revenue recognition. (AS 2301.08 and .13) Both financial statement and ICFR audits | AS 2301.8; AS 2301.13 | |
| 3 | Revenue | For certain of the issuer's revenue the firm did not identify and test any controls that addressed whether the issuer satisfied its performance obligation before recognizing revenue. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 |
Issuer G3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm's internal inspection program inspected this audit and reviewed one of these areas but did not identify the deficiencies below. The issuer recognized revenue from contracts that included multiple performance obligations and allocated the total transaction price to the separate performance obligations based on relative standalone selling prices (SSPs). The issuer used various methods to determine the SSPs for each of the performance obligations. The firm did not evaluate certain evidence that suggested that the issuer's methods to determine the SSPs and the resulting allocation of the transaction price to the separate performance obligations may not be appropriate. (AS 2501.10; AS 2810.03) Financial statement audit only | AS 2501.10; AS 2810.3 | |
| 2 | Revenue | The firm's substantive procedures to test certain of the issuer's revenue disclosures consisted of tracing the amounts disclosed to schedules prepared by the issuer. The firm did not perform any procedures to test or test any controls over the accuracy and completeness of these issuer-prepared schedules. (AS 1105.10) Financial statement audit only | AS 1105.10 | |
| 3 | Share-Based Compensation | The firm's substantive procedures to test the issuer's stock-based compensation disclosures consisted of tracing the amounts disclosed to a report generated from one of the issuer's IT systems. The firm did not perform any procedures to test or test any controls over the accuracy and completeness of this report. (AS 1105.10) Financial statement audit only | AS 1105.10 |
Issuer H2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm's sample for testing certain revenue was too small to provide sufficient appropriate audit evidence because in determining the sample size the firm did not take into account tolerable misstatement the allowable risk of incorrect acceptance and the characteristics of the population including the expected size and frequency of misstatements. (AS 2315.16 .19 .23 and .23A) Financial statement audit only | AS 2315.16; AS 2315.19; AS 2315.23; AS 2315.23A | |
| 2 | Revenue | The firm's substantive procedures to test certain of the issuer's revenue disclosures consisted of tracing the amounts disclosed to schedules prepared by the issuer. The firm did not perform any procedures to test or test any controls over the accuracy and completeness of these issuer-prepared schedules. (AS 1105.10) Financial statement audit only | AS 1105.10 |