- Inspection year
- 2022
- Report date
- 30-Nov-2023
- PCAOB release
- 104-2024-037
- Audits reviewed
- 12
- Audits w/ Part I.A deficiencies
- 10
- Part I.A deficiency rate
- 83%
- Part I.A deficiencies
- 52
- Part I.B deficiencies
- 7
- Report
- View PDF ↗
Deficiencies (52)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A11 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm's internal inspection program inspected this audit and reviewed the revenue area but did not identify the deficiency below. The issuer used multiple service organizations to host and/or maintain information technology (IT) systems that the issuer used to initiate process and record transactions related to this revenue. In its testing of controls over this account the firm tested certain IT-dependent manual controls that used data and reports generated or maintained by these IT systems. As a result of the deficiencies in the firm's testing of IT general controls the firm's testing of these IT-dependent manual controls was not sufficient. (AS 2201.46) Both financial statement and ICFR audits | AS 2201.46 | |
| 2 | Revenue | The firm's internal inspection program inspected this audit and reviewed the revenue area but did not identify the deficiency below. The issuer used multiple service organizations to host and/or maintain information technology (IT) systems that the issuer used to initiate process and record transactions related to this revenue. · The firm selected for testing complementary user controls that consisted of the issuer's reviews of user access to these IT systems. The firm did not evaluate the specific review procedures that the control owners performed to determine whether previously granted access continued to be appropriate. (AS 2201.42 .44 and .B22) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44; AS 2201.B22 | |
| 3 | Revenue | The firm's internal inspection program inspected this audit and reviewed the revenue area but did not identify the deficiency below. The issuer used multiple service organizations to host and/or maintain information technology (IT) systems that the issuer used to initiate process and record transactions related to this revenue. · The firm selected for testing certain other controls over user access but did not perform procedures to test or test any controls over the accuracy and completeness of certain information that the firm used in its testing. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 4 | Revenue | The firm's internal inspection program inspected this audit and reviewed the revenue area but did not identify the deficiency below. The firm did not identify and test any controls over the accuracy and completeness of certain information that the issuer used to process and record this revenue. Further the firm did not identify and test any controls that addressed whether the performance obligation was satisfied before this revenue was recognized. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 5 | Revenue | The firm's internal inspection program inspected this audit and reviewed the revenue area but did not identify the deficiency below. The sample size the firm used in certain of its substantive procedures to test this revenue was 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 | |
| 6 | Business Combinations | The issuer determined the fair values of certain acquired assets using cash-flow forecasts. The following deficiency was identified: · The firm selected for testing a control that included the issuer's review of assumptions used in these cash flow forecasts. The firm did not evaluate the specific review procedures that the control owner performed to assess the reasonableness of certain of these assumptions. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | Significant risk |
| 7 | Business Combinations | The issuer determined the fair values of certain acquired assets using cash-flow forecasts. The following deficiency was identified: · The firm selected for testing a control that included the issuer's review of assumptions used in these cash flow forecasts. The firm did not identify and test any controls over the accuracy and completeness of certain issuer-produced reports used in the operation of the control. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | Significant risk |
| 8 | Business Combinations | The issuer determined the fair values of certain acquired assets using cash-flow forecasts. The following deficiency was identified: · The firm did not perform procedures to test or test any controls over the accuracy and completeness of certain issuer-produced reports used to develop certain assumptions that were used to determine these fair values. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | Significant risk |
| 9 | Business Combinations | The issuer determined the fair values of certain acquired assets using cash-flow forecasts. The following deficiency was identified: · The firm did not sufficiently evaluate the reasonableness of certain significant assumptions the issuer used because the firm did not evaluate (1) the relevance and reliability of certain market information it used and (2) whether these assumptions were consistent with certain industry factors and existing market information. (AS 1105.04 and .06; AS 2501.16) Both financial statement and ICFR audits | AS 1101.6; AS 1105.4; AS 2501.16 | Significant risk |
| 10 | Business Combinations | The issuer determined the fair values of certain acquired assets using cash-flow forecasts. The following deficiency was identified: · The firm did not evaluate the reasonableness of the useful lives assigned to certain of the acquired assets including evaluating significant differences between the useful lives assigned to these assets and the cash flow forecast periods used to determine their fair values. (AS 2501.16) Both financial statement and ICFR audits | AS 2501.16 | Significant risk |
| 11 | Business Combinations | The issuer determined the fair values of certain other assets of the acquired business based on two previously completed acquisitions. The firm did not sufficiently evaluate whether the issuer had a reasonable basis for the significant assumptions the issuer used because the firm did not evaluate whether these previous acquisitions were comparable to this acquired business. (AS 2501.16) Both financial statement and ICFR audits | AS 2501.16 | Significant risk |
Issuer B9 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Share-Based Compensation | During the audit the firm did not identify and evaluate that the issuer's accounting for compensation expense associated with certain equity awards was not in conformity with FASB ASC Topic 718 Compensation – Stock Compensation. (AS 2810.30) Unrelated to our review the issuer reevaluated its accounting for compensation expense related to these equity awards and concluded that a material misstatement existed that had not been previously identified. The issuer subsequently restated its financial statements and the firm revised and reissued its report on the financial statements. Financial statement audit only | AS 2810.30 | |
| 2 | Business Combinations | During the year the issuer acquired multiple businesses and engaged specialists to assist it in determining the fair values of certain acquired assets using various significant assumptions. The following deficiency was identified: · For certain acquired intangible assets the firm did not perform any procedures to evaluate the reasonableness of certain significant assumptions developed by the issuer including evaluating significant differences between the useful lives assigned to these intangible assets and the cash flow forecast periods used to determine their fair values. (AS 2501.16) Financial statement audit only | AS 2501.16 | Significant risk |
| 3 | Business Combinations | During the year the issuer acquired multiple businesses and engaged specialists to assist it in determining the fair values of certain acquired assets using various significant assumptions. The following deficiency was identified: · For certain acquired intangible assets the firm did not perform any procedures to evaluate the relevance and reliability of certain information that the issuer used to develop certain of these assumptions. (AS 1105.04 and .06) Financial statement audit only | AS 1101.6; AS 1105.4 | Significant risk |
| 4 | Business Combinations | During the year the issuer acquired multiple businesses and engaged specialists to assist it in determining the fair values of certain acquired assets using various significant assumptions. The following deficiency was identified: · For firm did not perform procedures to test the fair values of certain tangible assets acquired and liabilities assumed beyond reading an issuer-prepared memorandum. (AS 2501.07) Financial statement audit only | AS 2501.7 | Significant risk |
| 5 | Business Combinations | During the year the issuer acquired multiple businesses and engaged specialists to assist it in determining the fair values of certain acquired assets using various significant assumptions. The following deficiency was identified: · In its testing of the fair values of certain other acquired tangible assets the firm used a company's specialist's valuation report as audit evidence without performing procedures to evaluate the work of this specialist. (AS 1105.A1-.A9; AS 2501.07) Financial statement audit only | AS 1105.A1; 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 | Significant risk |
| 6 | Business Combinations | During the year the issuer acquired multiple businesses and engaged specialists to assist it in determining the fair values of certain acquired assets using various significant assumptions. The following deficiency was identified: · For two of these business combinations the firm did not perform any procedures to test whether any deferred tax liabilities should have been recognized in connection with the business combinations. (AS 2301.08) Financial statement audit only | AS 2301.8 | Significant risk |
| 7 | Business Combinations | The firm used an auditor-employed specialist to assist it with testing the fair values of certain acquired assets which were determined by the company's specialists. The following deficiency was identified: · For certain acquired intangible assets the firm did not identify that the auditor-employed specialist did not perform any procedures to (1) evaluate certain of the significant assumptions that were developed by one of the company's specialists and used to determine the fair values of these acquired assets and (2) test the accuracy and completeness of certain issuer-produced data that were used by this specialist to develop these significant assumptions. (AS 1105.A8a and .A8b; AS 1201.C6 and .C7) Financial statement audit only | AS 1105.A8a; AS 1105.A8b; AS 1201.C6; AS 1201.C7 | Significant risk |
| 8 | Business Combinations | The firm used an auditor-employed specialist to assist it with testing the fair values of certain acquired assets which were determined by the company's specialists. The following deficiency was identified: · For one of these business combinations the firm did not identify that the auditor-employed specialist did not sufficiently evaluate the relevance and reliability of this company's specialist's work because it did not identify inconsistencies between the measurement of the enterprise fair value estimated by this specialist compared to the fair value of the consideration transferred by the issuer. (AS 1105.A9 and .A10; AS 1201.C6 and .C7) Financial statement audit only | AS 1105.A10; AS 1105.A9; AS 1201.C6; AS 1201.C7 | Significant risk |
| 9 | Business Combinations | The firm used an auditor-employed specialist to assist it with testing the fair values of certain acquired assets which were determined by the company's specialists. The following deficiency was identified: · In testing the fair values of certain acquired tangible assets the firm did not identify that the auditor-employed specialist did not evaluate the relevance and/or reliability of certain external information used by another of the company's specialists or the auditor-employed specialist. (AS 1105.04 .06 and .A8a; AS 1201.C6 and .C7) Financial statement audit only | AS 1105.4; AS 1105.6; AS 1201.C6; AS 1201.C7 | Significant risk |
Issuer C8 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm's internal inspection program inspected this audit and reviewed this area but did not identify certain of the deficiency below. The firm identified a control deficiency related to the issuer's lack of controls over amounts invoiced to customers. The firm identified various controls that it believed would compensate for this deficiency but did not identify that these controls did not address whether amounts invoiced to customers were accurate. (AS 2201.68) Both financial statement and ICFR audits | AS 2201.68 | |
| 2 | Revenue | The firm's internal inspection program inspected this audit and reviewed this area but did not identify certain of the deficiency below. The firm selected for testing various controls over revenue but did not identify and test any controls over the accuracy and completeness of certain system-generated data that were used in the operation of these controls. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 3 | Revenue | The firm's internal inspection program inspected this audit and reviewed this area but did not identify certain of the deficiency below. For certain types of revenue the firm did not perform any procedures to test or test any controls over the accuracy and completeness of certain system-generated data the firm used in its substantive testing. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 4 | Revenue | The firm's internal inspection program inspected this audit and reviewed this area but did not identify certain of the deficiency below. For certain types of revenue the firm used certain emails from the issuer's customers as audit evidence to test these types of revenue but did not perform any procedures to evaluate whether the information included in these emails was reliable. (AS 1105.04 and .06) Both financial statement and ICFR audits | AS 1105.4; AS 1105.6 | |
| 5 | Revenue | The firm's internal inspection program inspected this audit and reviewed this area but did not identify certain of the deficiency below. For another type of revenue that included an estimate of variable consideration in the transaction price the following deficiency was identified: · The firm selected for testing a control that consisted of the issuer's review of certain assumptions used to determine this estimate. The firm did not evaluate the specific review procedures that the control owner performed to assess the reasonableness of these assumptions. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 6 | Revenue | The firm's internal inspection program inspected this audit and reviewed this area but did not identify certain of the deficiency below. For another type of revenue that included an estimate of variable consideration in the transaction price the following deficiency was identified: · The firm's approach for substantively testing this estimate was to test the issuer's process. The firm did not evaluate the reasonableness of certain of the significant assumptions that the issuer used to determine this estimate. (AS 2501.16) Both financial statement and ICFR audits | AS 2501.16 | |
| 7 | Revenue | The firm's internal inspection program inspected this audit and reviewed this area but did not identify certain of the deficiency below. For another type of revenue that included an estimate of variable consideration in the transaction price the following deficiency was identified: · The firm's approach for substantively testing this estimate was to test the issuer's process. The firm did not test or test any controls over the accuracy and completeness of certain system-generated data that the issuer used to determine this estimate. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 8 | Revenue | The firm's internal inspection program inspected this audit and reviewed this area but did not identify certain of the deficiency below. For another type of revenue that included an estimate of variable consideration in the transaction price the following deficiency was identified: · The firm's procedures to test the occurrence of this revenue consisted of testing a sample of transactions from the last month of the year. The firm did not perform any procedures to test the remaining population of this revenue. (AS 2315.24) Both financial statement and ICFR audits | AS 2315.24 |
Issuer D4 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm's substantive procedures to test revenue included testing a sample of transactions. The firm did not perform any procedures to test whether the performance obligation was satisfied before revenue was recognized. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 2 | Revenue | The firm's substantive procedures to test revenue included testing a sample of transactions. The firm used information from the issuer and from external sources in its testing of certain of these transactions. The firm did not (1) test or test any controls over the accuracy and completeness of the issuer-produced information and (2) evaluate the reliability of the external information. (AS 1105.04 .06 and .10) Financial statement audit only | AS 1105.4; AS 1105.6; AS 1105.10 | |
| 3 | Business Combinations | During the year the issuer entered into a transaction and engaged a specialist to assist it in determining the fair value of a certain liability recorded in connection with the transaction. The following deficiencies were identified: · The firm's approach for substantively testing the fair value of this liability was to test the issuer's process and the firm used an auditor-engaged specialist to assist it with evaluating the significant assumptions the company's specialist used. The firm did not identify that the auditor-engaged specialist did not (1) perform any procedures to evaluate the reasonableness of a significant assumption and (2) evaluate whether certain external data that the company's specialist used to develop this significant assumption were relevant or reliable. (AS 1105.A8a and .A8b; AS 1210.09 and .12) Financial statement audit only | AS 1105.A8a; AS 1105.A8b; AS 1210.9; AS 1210.12 | Significant risk |
| 4 | Business Combinations | During the year the issuer entered into a transaction and engaged a specialist to assist it in determining the fair value of a certain liability recorded in connection with the transaction. The following deficiencies were identified: · The issuer recognized another liability in connection with this transaction. The firm did not evaluate whether the issuer appropriately assessed certain relevant information when it calculated this liability. (AS 2301.08 and .11) Financial statement audit only | AS 2301.8; AS 2301.11 | Significant risk |
Issuer E6 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm's substantive procedures to test certain revenue included testing a sample of transactions. The firm did not perform any procedures to test whether the performance obligation was satisfied before revenue was recognized. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 2 | Revenue | The firm's substantive procedures to test certain revenue included testing a sample of transactions. The firm used certain issuer-produced data in these substantive procedures but did not test or test any controls over the accuracy and completeness of these data. (AS 1105.10) Financial statement audit only | AS 1105.10 | |
| 3 | Inventory | For certain inventory the firm's approach for substantively testing the reserve for excess and obsolete (E&O) inventory was to test the issuer's process. The firm did not evaluate the reasonableness of certain significant assumptions the issuer used to develop the E&O reserve. (AS 2501.16) Financial statement audit only | AS 2501.16 | Significant risk |
| 4 | Inventory | For certain inventory the firm's approach for substantively testing the reserve for excess and obsolete (E&O) inventory was to test the issuer's process. For certain other inventory the firm did not perform any procedures to test the E&O reserve. (AS 2501.07) Financial statement audit only | AS 2501.7 | Significant risk |
| 5 | Inventory | The firm's substantive procedures to test the unit cost of certain manufactured inventory consisted of (1) selecting a sample of inventory items for testing and (2) performing substantive analytical procedures. The following deficiencies were identified: · For the items selected for testing the firm did not perform sufficient procedures to test the cost of the raw materials because its procedures were limited to comparing certain of these costs to system-generated reports. (AS 2301.08) Financial statement audit only | AS 2301.8 | Significant risk |
| 6 | Inventory | The firm's substantive procedures to test the unit cost of certain manufactured inventory consisted of (1) selecting a sample of inventory items for testing and (2) performing substantive analytical procedures. The following deficiencies were identified: · For the substantive analytical procedures the firm did not determine whether the expectations it used in these analytical procedures were based on predictable relationships. Further the firm identified differences in excess of the firm's established threshold but did not evaluate certain of these differences beyond in some instances inquiring of management. (AS 2305.13 .14 and .21) Financial statement audit only | AS 2305.13; AS 2305.14; AS 2305.21 | Significant risk |
Issuer F5 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Inventory | The firm's substantive procedures to test the reserve for excess and obsolete (E&O) inventory included selecting a sample of inventory items for testing. The following deficiencies were identified: · The firm did not perform any procedures to test or test any controls over the accuracy and completeness of certain issuer-produced reports used in these substantive procedures. (AS 1105.10) Financial statement audit only | AS 1105.10 | Significant risk |
| 2 | Inventory | The firm's substantive procedures to test the reserve for excess and obsolete (E&O) inventory included selecting a sample of inventory items for testing. The following deficiencies were identified: · For certain of its selections the firm did not perform any procedures to test the sales forecast that the issuer used to develop the E&O reserve. (AS 2501.07) Financial statement audit only | AS 2501.7 | Significant risk |
| 3 | Inventory | The firm's substantive procedures to test the reserve for excess and obsolete (E&O) inventory included selecting a sample of inventory items for testing. The following deficiencies were identified: · For certain other selections the firm did not perform procedures beyond inquiring of management to test the issuer's conclusion that an E&O reserve was not necessary. (AS 2501.07) Financial statement audit only | AS 2501.7 | Significant risk |
| 4 | Inventory | The issuer held certain inventory at foreign external warehouses which represented a significant proportion of the issuer's total assets. The firm did not perform sufficient procedures to test the existence of this inventory because it limited its procedures to confirming the quantities of this inventory with the external warehouses. (AS 2510.14) Financial statement audit only | AS 2510.14 | Significant risk |
| 5 | Revenue | The firm's substantive procedures to test certain of the issuer's revenue disclosures consisted of tracing the amounts disclosed to schedules produced by the issuer. The firm did not perform any procedures to test or test any controls over the accuracy and completeness of these issuer-produced schedules. (AS 1105.10) Financial statement audit only | AS 1105.10 |
Issuer G4 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Deferred Revenue | The firm's internal inspection program inspected this audit and reviewed the revenue area but did not identify the deficiency below. The firm's substantive procedures to test two types of revenue and the deferred revenue related to one of these types of revenue consisted of performing substantive analytical procedures and tests of details. The following deficiency was identified: · For both types of revenue the firm used certain system-generated data or reports in its substantive analytical procedures but did not test or test any controls over the accuracy and/or completeness of these data or reports. (AS 2305.16) Financial statement audit only | AS 2305.16 | |
| 2 | Deferred Revenue | The firm's internal inspection program inspected this audit and reviewed the revenue area but did not identify the deficiency below. The firm's substantive procedures to test two types of revenue and the deferred revenue related to one of these types of revenue consisted of performing substantive analytical procedures and tests of details. The following deficiency was identified: · For one of these types of revenue and the related deferred revenue the firm's tests of details included comparing amounts the issuer recorded to revenue and deferred revenue to cash receipts included in the issuer's bank statements. The firm did not perform any procedures to test certain reconciling items it identified in these comparisons. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 3 | Income Taxes | The firm's internal inspection program inspected this audit and reviewed the revenue area but did not identify the deficiency below. The firm's approach for substantively testing the valuation allowance that the issuer recorded against its deferred tax assets was to test the issuer's process. The firm did not perform any procedures to evaluate the reasonableness of the significant assumptions the issuer used to determine the valuation allowance beyond inquiring of management. (AS 2501.16) Financial statement audit only | AS 2501.16 | |
| 4 | Income Taxes | The firm's internal inspection program inspected this audit and reviewed the revenue area but did not identify the deficiency below. The firm did not perform any substantive procedures to test certain of the issuer's income tax disclosures. (AS 2301.08) Financial statement audit only | AS 2301.8 |
Issuer H2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Allowance for Credit/Loan Losses | For loans that were collectively evaluated for impairment the issuer determined the qualitative reserve component of the ALL using various qualitative factors. The following deficiency was identified: · The firm selected for testing controls that included the issuer's reviews of the qualitative factors for reasonableness. The firm did not evaluate the specific review procedures that the control owners performed to assess the reasonableness of these qualitative factors. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | Significant risk |
| 2 | Allowance for Credit/Loan Losses | For loans that were collectively evaluated for impairment the issuer determined the qualitative reserve component of the ALL using various qualitative factors. The following deficiency was identified: · The firm's approach for substantively testing the ALL was to test the issuer's process. The firm did not sufficiently evaluate whether the issuer had a reasonable basis for these qualitative factors because the firm's procedures were limited to (1) reading the issuer's ALL memorandum and (2) comparing the qualitative factors the issuer used to those used in prior periods. (AS 2501.16) Both financial statement and ICFR audits | AS 2501.16 | Significant risk |
Issuer I2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Income Taxes | The firm did not perform any substantive procedures to test the valuation allowance that the issuer recorded against its deferred tax assets beyond inquiring of management. (AS 2501.07) Financial statement audit only | AS 2501.7 | Significant risk |
| 2 | Income Taxes | The firm did not perform any substantive procedures to test certain deferred tax assets beyond comparing certain information from the supporting schedules that the issuer used to calculate these deferred tax assets to the general ledger. (AS 2301.08) Financial statement audit only | AS 2301.8 | Significant risk |
Issuer J1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Allowance for Credit/Loan Losses | For loans that were collectively evaluated for impairment the issuer determined the quantitative reserve component of the ALL using various assumptions. The firm's approach for substantively testing the ALL was to test the issuer's process. The firm did not evaluate whether the issuer had a reasonable basis for certain significant assumptions beyond reading an issuer-prepared memorandum. (AS 2501.16) Financial statement audit only | AS 2501.16 | Significant risk |