- Inspection year
- 2022
- Report date
- 07-Nov-2023
- PCAOB release
- 104-2024-039
- Audits reviewed
- 9
- Audits w/ Part I.A deficiencies
- 4
- Part I.A deficiency rate
- 44%
- Part I.A deficiencies
- 11
- Part I.B deficiencies
- 1
- Report
- View PDF ↗
Deficiencies (11)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A6 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Investments | The issuer reported certain equity investments and engaged specialists to estimate the fair value of these investments. The firm's approach for substantively testing the fair value of these investments was to test the issuer's process and the firm used an auditor-engaged specialist to evaluate certain significant assumptions the company's specialists used. The following deficiencies were identified: · With respect to one investment the firm did not perform any procedures to evaluate the reasonableness of certain significant assumptions the company's specialist used to estimate the fair value. (AS 2501.16) Financial statement audit only | AS 2501.16 | |
| 2 | Investments | The issuer reported certain equity investments and engaged specialists to estimate the fair value of these investments. The firm's approach for substantively testing the fair value of these investments was to test the issuer's process and the firm used an auditor-engaged specialist to evaluate certain significant assumptions the company's specialists used. The following deficiencies were identified: · With respect to a second investment the firm did not sufficiently evaluate the reasonableness of certain significant assumptions developed by the company's specialist because it did not identify that the auditor-engaged specialist did not perform any procedures to evaluate the reasonableness of these assumptions. (AS 1105.A8b; AS 1210.09 and .12) Financial statement audit only | AS 1105.A8b; AS 1210.9; AS 1210.12 | |
| 3 | Investments | The issuer reported certain equity investments and engaged specialists to estimate the fair value of these investments. The firm's approach for substantively testing the fair value of these investments was to test the issuer's process and the firm used an auditor-engaged specialist to evaluate certain significant assumptions the company's specialists used. The following deficiencies were identified: · With respect to a second investment the auditor-engaged specialist did not sufficiently evaluate the reasonableness of another significant assumption because it did not (1) evaluate the relevance of certain external information used in its testing; (2) evaluate whether this assumption was consistent with the issuer's objectives strategies and related business risks; and (3) take into account the issuer's intent and ability to carry out its plans. (AS 1105.04 .06 and .A8b; AS 1210.09 and .12; AS 2501.17) Financial statement audit only | AS 1105.4; AS 1105.6; AS 1105.A8b; AS 1210.9; AS 1210.12; AS 2501.17 | |
| 4 | Investments | The issuer reported certain equity investments and engaged specialists to estimate the fair value of these investments. The firm's approach for substantively testing the fair value of these investments was to test the issuer's process and the firm used an auditor-engaged specialist to evaluate certain significant assumptions the company's specialists used. The following deficiencies were identified: · With respect to a third investment the firm did not perform sufficient procedures to test estimates that the company's specialist used to determine the investment's fair value because it did not identify that the auditor-engaged specialist did not perform any procedures with respect to the work the company's specialist performed. (AS 1210.09 and .12; AS 2501.07) Financial statement audit only | AS 1210.9; AS 1210.12; AS 2501.7 | |
| 5 | Investments | The issuer reported certain equity investments and engaged specialists to estimate the fair value of these investments. The firm's approach for substantively testing the fair value of these investments was to test the issuer's process and the firm used an auditor-engaged specialist to evaluate certain significant assumptions the company's specialists used. The following deficiencies were identified: · With respect to two other investments the firm did not sufficiently evaluate the reasonableness of certain significant assumptions developed by the company's specialists because it did not identify that the auditor-engaged specialist did not perform any procedures to evaluate the relevance and reliability of certain data the company's specialists used to develop these assumptions. (AS 1105.A8a; AS 1210.09 and .12) Financial statement audit only | AS 1105.A8b; AS 1210.9; AS 1210.12 | |
| 6 | Investments | The issuer reported certain equity investments and engaged specialists to estimate the fair value of these investments. The firm's approach for substantively testing the fair value of these investments was to test the issuer's process and the firm used an auditor-engaged specialist to evaluate certain significant assumptions the company's specialists used. The following deficiencies were identified: · With respect to two other investments the firm did not identify that the auditor-engaged specialist did not (1) sufficiently evaluate the reasonableness of certain of these assumptions because it did not evaluate the significant differences between the assumptions and the industry information it obtained or (2) perform any procedures to evaluate the reasonableness of the remainder of these assumptions. (AS 1105.A8b; AS 1210.09 and .12) Financial statement audit only | AS 1105.A8b; AS 1210.9; AS 1210.12 |
Issuer B2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Investments | The issuer reported certain equity investments and engaged a specialist to estimate the fair value of these investments. The company's specialist used the investees' financial results in estimating the fair value. The firm's approach for substantively testing the fair value of these investments was to test the issuer's process and the firm used an auditor-employed specialist to evaluate the significant assumptions developed by the company's specialist. The firm did not sufficiently test the fair value of these investments as follows: · For certain of these significant assumptions the firm did not identify that the auditor-employed specialist did not (1) evaluate the reasonableness of these assumptions and (2) sufficiently evaluate the relevance of certain data from external sources the company's specialist used to develop these assumptions because the auditor-employed specialist did not evaluate the differences between these data and the issuer's investments. (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 | |
| 2 | Investments | The issuer reported certain equity investments and engaged a specialist to estimate the fair value of these investments. The company's specialist used the investees' financial results in estimating the fair value. The firm's approach for substantively testing the fair value of these investments was to test the issuer's process and the firm used an auditor-employed specialist to evaluate the significant assumptions developed by the company's specialist. The firm did not sufficiently test the fair value of these investments as follows: · The firm did not sufficiently evaluate the investees' financial results it used as audit evidence because it did not (1) perform procedures to address the difference in year ends for certain of the investees and (2) apply or request that another auditor apply appropriate auditing procedures to the unaudited financial statements for certain other investees. (AS 1105.B1 - .B3) Financial statement audit only | AS 1105.B1; AS 1105.B2; AS 1105.B3 |
Issuer C2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Investments | The firm's approach for substantively testing the fair value of certain equity investments was to develop an independent expectation of the estimates using the work of an auditor-employed specialist. The firm did not perform sufficient procedures to test the fair value of these equity investments as follows: · The firm did not identify that the auditor-employed specialist did not perform sufficient procedures to evaluate the relevance of non-industry specific data from external sources it used to develop certain assumptions because the auditor-employed specialist did not evaluate the differences between using non-industry specific data and industry-specific data. (AS 1105.04 and .06; AS 1201.C6 and .C7) Financial statement audit only | AS 1105.4; AS 1105.6; AS 1201.C6; AS 1201.C7 | |
| 2 | Investments | The firm's approach for substantively testing the fair value of certain equity investments was to develop an independent expectation of the estimates using the work of an auditor-employed specialist. The firm did not perform sufficient procedures to test the fair value of these equity investments as follows: · The firm did not identify that the auditor-employed specialist did not perform procedures to demonstrate it had a reasonable basis for certain other assumptions it developed. (AS 1201.C6 and .C7; AS 2501.22) Financial statement audit only | AS 1201.C6; AS 1201.C7; AS 2501.22 |
Issuer D1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Investments | The firm identified that the issuer's categorization of certain investments within the fair value hierarchy was not in conformity with FASB ASC Topic 820 Fair Value Measurement. The firm did not appropriately evaluate the effect of this GAAP departure on the issuer's financial statements. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 |