- Inspection year
- 2022
- Report date
- 28-Nov-2023
- PCAOB release
- 104-2024-041
- Audits reviewed
- 25
- Audits w/ Part I.A deficiencies
- 14
- Part I.A deficiency rate
- 56%
- Part I.A deficiencies
- 64
- Part I.B deficiencies
- 17
- Report
- View PDF ↗
Deficiencies (64)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A7 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | For certain revenue the firm did not identify and evaluate that the issuer's determination that it was acting as an agent was not in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2810.30) Financial statement audit only | AS 2810.30 | |
| 2 | Revenue | The firm did not identify and evaluate the issuer's omission of a required disclosure under FASB ASC Topic 606 related to how the issuer recognized this revenue. (AS 2810.30 and .31) Unrelated to our review the issuer reevaluated its accounting and disclosures for this revenue and concluded that material misstatements existed that had not been previously identified. The issuer subsequently filed a Form 8-K indicating that its previously issued financial statements should not be relied on and corrected these misstatements in a subsequent filing. Financial statement audit only | AS 2810.30; AS 2810.31 | |
| 3 | Investments | During the year the issuer invested in an entity. The following deficiency was identified: · The firm did not evaluate whether the business purpose (or lack thereof) of this investment indicated that it may have been entered into to engage in fraudulent financial reporting given certain facts regarding this investment. (AS 2401.67) Unrelated to our review the issuer reevaluated its accounting for this investment and concluded that a material misstatement existed that had not been previously identified. The issuer corrected this misstatement in a subsequent filing. Financial statement audit only | AS 2401.67 | |
| 4 | Investments | During the year the issuer invested in an entity. The following deficiency was identified: · The firm did not evaluate whether the issuer's accounting for this investment was in conformity with certain requirements of GAAP. (AS 2301.08) Unrelated to our review the issuer reevaluated its accounting for this investment and concluded that a material misstatement existed that had not been previously identified. The issuer corrected this misstatement in a subsequent filing. Financial statement audit only | AS 2301.8 | |
| 5 | Investments | During the year the issuer invested in an entity. The following deficiency was identified: · The firm did not identify and evaluate that the issuer's presentation of this investment within the statement of cash flows was not in conformity with FASB ASC Topic 230 Statement of Cash Flows. (AS 2810.30 and .31) Unrelated to our review the issuer reevaluated its accounting for this investment and concluded that a material misstatement existed that had not been previously identified. The issuer corrected this misstatement in a subsequent filing. Financial statement audit only | AS 2810.30; AS 2810.31 | |
| 6 | Intangible Assets | The firm did not perform sufficient procedures to evaluate the issuer's presentation of an investment and certain intangible assets as current assets because it did not evaluate the issuer's intent to consume all or a portion of these assets within one year from the balance sheet date. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 7 | Intangible Assets | The firm did not identify and evaluate that the method the issuer used to estimate the impairment of certain intangible assets was not in conformity with FASB ASC Topic 350 Intangible Assets Goodwill and Other. (AS 2810.30) Unrelated to our review the issuer reevaluated its accounting for these assets and concluded that material misstatements existed that had not been previously identified. The issuer subsequently filed a Form 8-K indicating that its previously issued financial statements should not be relied on and corrected these misstatements in a subsequent filing. Financial statement audit only | AS 2810.30 |
Issuer B12 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Business Combinations | During the year the issuer acquired multiple businesses and engaged a specialist to assist it in determining the fair values of certain acquired assets using various significant assumptions. The following deficiency was identified: · The firm did not perform procedures beyond inquiry of management to evaluate the reasonableness of certain significant assumptions developed by the issuer. (AS 2501.16) Financial statement audit only | AS 2501.16 | Significant risk |
| 2 | Business Combinations | During the year the issuer acquired multiple businesses and engaged a specialist to assist it in determining the fair values of certain acquired assets using various significant assumptions. The following deficiency was identified: · The firm used an auditor-employed specialist to evaluate certain significant assumptions developed by the company's specialist and used in the measurement of certain acquired intangible assets. The firm did not identify that the auditor-employed specialist did not perform any procedures to evaluate these assumptions. (AS 1105.A8b; AS 1201.C6 and .C7) Financial statement audit only | AS 1105.A8b; AS 1201.C6; AS 1201.C7 | Significant risk |
| 3 | Business Combinations | During the year the issuer acquired multiple businesses and engaged a specialist to assist it in determining the fair values of certain acquired assets using various significant assumptions. The following deficiency was identified: · For one of these business combinations the firm did not sufficiently evaluate the relevance and reliability of the company's specialist's work because it did not identify and evaluate inconsistencies between the measurement of or significant assumptions used in the enterprise fair value estimated by the company's specialist compared to both (1) the fair value of the consideration transferred by the issuer and (2) certain significant assumptions developed by the company's specialist. (AS 1105.A9 and .A10) Financial statement audit only | AS 1105.A10; AS 1105.A9 | Significant risk |
| 4 | Business Combinations | During the year the issuer acquired multiple businesses and engaged a specialist to assist it in determining the fair values of certain acquired assets using various significant assumptions. The following deficiency was identified: · For one of these business combinations the fair value measurement of acquired customer relationships resulted in a negative balance and the issuer concluded that an associated intangible asset did not exist. The firm did not evaluate whether the negative fair value represented future contract losses and should have been recorded as an assumed liability in conformity with FASB ASC Topic 805 Business Combinations. (AS 2301.08) Financial statement audit only | AS 2301.8 | Significant risk |
| 5 | Business Combinations | The firm used an auditor-engaged specialist to assist it with testing the fair value of an acquired asset which was determined by the company's specialist. The auditor-engaged specialist's approach consisted of (1) testing the issuer's process and (2) developing an independent expectation of the fair value as a range. The following deficiency was identified · The firm did not identify that the auditor-engaged specialist did not sufficiently evaluate whether the valuation method used by the company's specialist was appropriate under the circumstances because it did not consider the highest and best use of the acquired asset. (AS 1105.A8c; AS 1210.09 and .12) In connection with our review the issuer reevaluated its accounting for this asset and determined that an error existed that had not been previously identified. The issuer corrected this error in a subsequent filing. Financial statement audit only | AS 1105.A8c; AS 1210.9; AS 1210.12 | Significant risk |
| 6 | Business Combinations | The firm used an auditor-engaged specialist to assist it with testing the fair value of an acquired asset which was determined by the company's specialist. The auditor-engaged specialist's approach consisted of (1) testing the issuer's process and (2) developing an independent expectation of the fair value as a range. The following deficiency was identified · When testing the issuer's process the firm did not identify that the auditor-engaged specialist did not perform any procedures to evaluate the reasonableness of a significant assumption developed by the company's specialist. (AS 1105.A8b; AS 1210.09 and .12) In connection with our review the issuer reevaluated its accounting for this asset and determined that an error existed that had not been previously identified. The issuer corrected this error in a subsequent filing. Financial statement audit only | AS 1105.A8b; AS 1210.9; AS 1210.12 | Significant risk |
| 7 | Business Combinations | The firm used an auditor-engaged specialist to assist it with testing the fair value of an acquired asset which was determined by the company's specialist. The auditor-engaged specialist's approach consisted of (1) testing the issuer's process and (2) developing an independent expectation of the fair value as a range. The following deficiency was identified · The firm did not evaluate whether the auditor-engaged specialist's independent expectation of the fair value as a range encompassed only reasonable outcomes and was supported by sufficient appropriate audit evidence. (AS 1210.09 and .12; AS 2501.25) In connection with our review the issuer reevaluated its accounting for this asset and determined that an error existed that had not been previously identified. The issuer corrected this error in a subsequent filing. Financial statement audit only | AS 1210.9; AS 1210.12; AS 2501.25 | Significant risk |
| 8 | Business Combinations | The firm used an auditor-engaged specialist to assist it with testing the fair value of an acquired asset which was determined by the company's specialist. The auditor-engaged specialist's approach consisted of (1) testing the issuer's process and (2) developing an independent expectation of the fair value as a range. The following deficiency was identified · The firm did not perform any procedures to evaluate the relevance and reliability of certain information used by the auditor-engaged specialist to develop its independent expectation. (AS 1105.04 and .06; AS 1210.09 and .12) In connection with our review the issuer reevaluated its accounting for this asset and determined that an error existed that had not been previously identified. The issuer corrected this error in a subsequent filing. Financial statement audit only | AS 1105.4; AS 1105.6; AS 1210.9; AS 1210.12 | Significant risk |
| 9 | Business Combinations | The firm used an auditor-engaged specialist to assist it with testing the fair value of an acquired asset which was determined by the company's specialist. The auditor-engaged specialist's approach consisted of (1) testing the issuer's process and (2) developing an independent expectation of the fair value as a range. The following deficiency was identified · The firm did not identify and evaluate that the issuer incorrectly recorded the fair value of the acquired asset determined by the company's specialist. (AS 2810.30) In connection with our review the issuer reevaluated its accounting for this asset and determined that an error existed that had not been previously identified. The issuer corrected this error in a subsequent filing. Financial statement audit only | AS 2810.30 | Significant risk |
| 10 | Intangible Assets | The firm did not identify and evaluate that the method the issuer used to estimate the impairment of certain intangible assets was not in conformity with FASB ASC Topic 350. (AS 2810.30) Unrelated to our review the issuer reevaluated its accounting for these assets and concluded that misstatements existed that had not been previously identified. The issuer subsequently filed a Form 8-K indicating that its previously issued financial statements should not be relied on and corrected these misstatements in a subsequent filing. Financial statement audit only | AS 2810.30 | |
| 11 | Intangible Assets | The firm did not identify and evaluate that the issuer's omission of certain disclosures for assets measured at fair value on a nonrecurring basis was not in conformity with FASB ASC Topic 820 Fair Value Measurements. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 | |
| 12 | Intangible Assets | The firm did not perform sufficient procedures to evaluate the issuer's presentation of certain intangible assets as current assets because it did not evaluate the issuer's intent to consume all or a portion of these assets within one year from the balance sheet date. (AS 2301.08) Financial statement audit only | AS 2301.8 |
Issuer C10 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Business Combinations | During the year the issuer acquired multiple businesses and engaged a specialist to assist it in determining the fair values of certain acquired assets using various significant assumptions. The following deficiency was identified: · For certain acquired assets in these business combinations the firm did not perform any procedures to evaluate the reasonableness of certain significant assumptions developed by the company's specialist or developed by the issuer 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 1105.A8b; AS 2501.16) Financial statement audit only | AS 1105.A8b; AS 2501.16 | Significant risk |
| 2 | Business Combinations | During the year the issuer acquired multiple businesses and engaged a specialist 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 used an auditor-employed specialist to evaluate another significant assumption developed by the company's specialist and used in the measurement of these acquired assets. The firm did not identify that the auditor-employed specialist did not perform any procedures to evaluate this assumption. (AS 1105.A8b; AS 1201.C6 and .C7) Financial statement audit only | AS 1105.A8b; AS 1201.C6; AS 1201.C7 | Significant risk |
| 3 | Business Combinations | During the year the issuer acquired multiple businesses and engaged a specialist to assist it in determining the fair values of certain acquired assets using various significant assumptions. The following deficiency was identified: · For one of these business combinations the firm used an auditor-engaged specialist to assist it with testing the fair value of another acquired asset which was determined by the company's specialist. The firm did not identify that the auditor-engaged specialist did not perform any procedures to evaluate the reasonableness of the significant assumptions developed by the company's specialist. (AS 1105.A8b; AS 1210.09 and .12) Financial statement audit only | AS 1105.A8b; AS 1210.9; AS 1210.12 | Significant risk |
| 4 | Business Combinations | During the year the issuer acquired multiple businesses and engaged a specialist to assist it in determining the fair values of certain acquired assets using various significant assumptions. The following deficiency was identified: · For one of these business combinations the firm used an auditor-engaged specialist to assist it with testing the fair value of another acquired asset which was determined by the company's specialist. The firm did not perform any procedures to evaluate the relevance and reliability of certain information used by the company's specialist in determining the fair value of this asset. (AS 1105.A8a) Financial statement audit only | AS 1105.A8a | Significant risk |
| 5 | Business Combinations | For certain business combinations the firm did not perform any procedures to test the fair values of certain other acquired assets. (AS 2501.07) Financial statement audit only | AS 2501.7 | Significant risk |
| 6 | Business Combinations | For two business combinations the firm did not perform any procedures to test the existence of certain of these assets upon acquisition. (AS 2301.08) Financial statement audit only | AS 2301.8 | Significant risk |
| 7 | Business Combinations | For two business combinations the firm's approach for substantively testing the fair values of the provisions for contingent consideration to be paid to the sellers was to develop independent expectations of the estimates using an auditor-employed specialist. The following deficiency was identified: · The firm did not perform any procedures to evaluate the reasonableness of certain significant assumptions developed by the issuer which were also used by the firm to develop its independent expectations. (AS 2501.16) Financial statement audit only | AS 2501.16 | Significant risk |
| 8 | Business Combinations | For two business combinations the firm's approach for substantively testing the fair values of the provisions for contingent consideration to be paid to the sellers was to develop independent expectations of the estimates using an auditor-employed specialist. The following deficiency was identified: · For one of these business combinations the firm did not evaluate a significant difference between the firm's independent expectation and the issuer's recorded contingent consideration. (AS 2810.13) Financial statement audit only | AS 2810.13 | Significant risk |
| 9 | Business Combinations | For two business combinations the firm's approach for substantively testing the fair values of the provisions for contingent consideration to be paid to the sellers was to develop independent expectations of the estimates using an auditor-employed specialist. The following deficiency was identified: · For the other business combination the firm used the auditor-employed specialist to evaluate a significant assumption developed by the company's specialist which was also used by the firm to develop its independent expectation. The firm did not identify that the auditor-employed specialist did not perform any procedures to evaluate this assumption. (AS 1105.A8b; AS 1201.C6 and .C7) Financial statement audit only | AS 1105.A8b; AS 1201.C6; AS 1201.C7 | Significant risk |
| 10 | Business Combinations | For certain business combinations the firm did not identify and evaluate the issuer's omission of certain disclosures required under FASB ASC Topic 805 and FASB ASC Topic 820 related to certain assets acquired. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 | Significant risk |
Issuer D4 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | For two types of revenue the firm did not evaluate whether the issuer was acting as a principal or as an agent. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 2 | Revenue | For one of these types of revenue and another type the issuer recognized revenue based on electronic activity. The firm used activity information produced by certain of the issuer's service organizations in its substantive testing of this revenue but did not perform any procedures to test the accuracy and completeness of this information. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 3 | Going Concern | During the year under audit the firm identified conditions and events that caused it to believe there could be substantial doubt about the issuer's ability to continue as a going concern for a reasonable period of time and concluded that the substantial doubt was alleviated by management's plans. The firm did not sufficiently test the reliability of the issuer's operating forecast that the firm used in its evaluation of management's plans. The firm compared the forecast to the issuer's results for the two months subsequent to year end and an issuer-prepared sensitivity analysis but did not evaluate the significant differences it identified. (AS 1105.04 and .06; AS 2415.03 .08 and .09) Financial statement audit only | AS 1105.4; AS 1105.6; AS 2415.3; AS 2415.8; AS 2415.9 | |
| 4 | Share-Based Compensation | During the year the issuer granted stock options to certain employees. The firm did not perform any procedures to evaluate the reasonableness of certain significant assumptions the issuer used to estimate the fair value of these stock options. (AS 2501.16) Financial statement audit only | AS 2501.16 |
Issuer E6 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | For one type of revenue the firm did not perform any substantive procedures to test whether the performance obligations had been satisfied before revenue was recognized. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 2 | Revenue | For this same type of revenue the firm did not identify and evaluate misstatements related to contract assets under FASB ASC Topic 606. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 | |
| 3 | Revenue | For another type of revenue the firm selected for testing an automated control over the initiation processing and recording of revenue transactions in order to rely on the accuracy and completeness of certain issuer-produced information that the firm used in its substantive testing. The firm did not sufficiently test the configuration of this control as it limited its testing to only certain scenarios without addressing the risks of material misstatement associated with the untested scenarios. (AS 2301.19 and .21) Financial statement audit only | AS 2301.19; AS 2301.21 | |
| 4 | Business Combinations | During the year the issuer acquired several businesses. For one business combination the following deficiency was identified: · The firm did not perform any procedures to test the fair value of assets acquired and liabilities assumed. (AS 2501.07) Financial statement audit only | AS 2501.7 | |
| 5 | Business Combinations | During the year the issuer acquired several businesses. For one business combination the following deficiency was identified: · The firm did not perform procedures to (1) evaluate the issuer's accounting for certain warrants issued in connection with the acquisition as equity; (2) test beyond recalculation the conversion ratio of equity instruments of the acquired company to equity instruments of the acquiror; and (3) test transaction costs incurred. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 6 | Business Combinations | For two business combinations the firm did not identify and evaluate the issuer's omission of certain required disclosures under FASB ASC Topic 820 related to certain assets acquired and a liability assumed. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 |
Issuer F2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer recorded certain revenue based on information provided by its customers. In the firm's substantive testing of this revenue the firm used this information but did not evaluate its reliability. (AS 1105.04 and .06) Financial statement audit only | AS 1105.4; AS 1105.6 | Significant risk |
| 2 | Long-Lived Assets | The issuer capitalized certain labor costs associated with the development of an asset. The firm used labor hours in its substantive testing of this asset but did not perform any procedures to test or test any controls over the accuracy and completeness of these labor hours. (AS 1105.10) Financial statement audit only | AS 1105.10 |
Issuer G2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm did not identify and evaluate the issuer's (1) misstatement in and (2) omission of certain disclosures related to the disaggregation of revenue that are required under FASB ASC Topic 606. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 | |
| 2 | Inventory | The firm used reports produced by the issuer in its substantive procedures to test (1) the reserve for excess and obsolete inventory and (2) whether finished goods inventory was recorded at the lower of cost or net realizable value. The firm did not perform any procedures to test or test any controls over the accuracy and completeness of these reports. (AS 1105.10) Financial statement audit only | AS 1105.10 | Significant risk |
Issuer H4 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Business Combinations | During the year the issuer acquired a business and engaged a specialist to assist it in determining the fair values of acquired intangible assets using various significant assumptions. The following deficiency was identified: · The firm did not perform procedures beyond inquiry to evaluate the reasonableness of certain significant assumptions developed by the issuer. (AS 2501.16) Financial statement audit only | AS 2501.16 | Significant risk |
| 2 | Business Combinations | During the year the issuer acquired a business and engaged a specialist to assist it in determining the fair values of acquired intangible assets using various significant assumptions. The following deficiency was identified: · The firm used an auditor-employed specialist to evaluate a significant assumption developed by the company's specialist. The firm did not identify that the auditor-employed specialist did not perform any procedures to evaluate this assumption. (AS 1105.A8b; AS 1201.C6 and .C7) Financial statement audit only | AS 1105.A8b; AS 1201.C6; AS 1201.C7 | Significant risk |
| 3 | Business Combinations | The firm did not evaluate whether in conformity with FASB ASC Topic 805 a separately identifiable intangible asset existed related to the retail customer base of the acquired business. (AS 2301.08) Financial statement audit only | AS 2301.8 | Significant risk |
| 4 | Business Combinations | The firm did not identify and evaluate the issuer's omission of certain required disclosures under FASB ASC Topic 820 related to certain assets acquired. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 | Significant risk |
Issuer I4 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Business Combinations | During the year the issuer acquired a business and engaged a specialist to assist it in determining the fair value of an acquired intangible asset using various significant assumptions. The following deficiency was identified: · The firm did not sufficiently evaluate the reasonableness of certain significant assumptions developed by the issuer because it did not (1) evaluate the relevance and reliability of certain market information it used and (2) take into account whether these assumptions were consistent with the issuer's intent and ability to carry out its plans. (AS 1105.04 and .06; AS 2501.16 and .17) Financial statement audit only | AS 1105.4; AS 1105.6; AS 2501.16; AS 2501.17 | Significant risk |
| 2 | Business Combinations | During the year the issuer acquired a business and engaged a specialist to assist it in determining the fair value of an acquired intangible asset using various significant assumptions. The following deficiency was identified: · The firm did not perform procedures beyond inquiry to evaluate the reasonableness of certain other significant assumptions developed by the company's specialist or developed by the issuer. (AS 1105. A8b; AS 2501.16) Financial statement audit only | AS 1105.A8b; AS 2501.16 | Significant risk |
| 3 | Business Combinations | The firm did not evaluate whether in conformity with FASB ASC Topic 805 separately identifiable intangible assets existed related to the existing customer base and trade names of the acquired business. (AS 2301.08) Financial statement audit only | AS 2301.8 | Significant risk |
| 4 | Business Combinations | The firm did not identify and evaluate the issuer's omission of certain disclosures required under FASB ASC Topic 805 and FASB ASC Topic 820 related to certain assets acquired. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 | Significant risk |
Issuer J4 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Business Combinations | During the year the issuer acquired a business and engaged a specialist to assist it in determining the fair values of certain acquired intangible assets using various significant assumptions. The following deficiency was identified: · The firm did not sufficiently evaluate the reasonableness of a significant assumption developed by the issuer because it did not evaluate a significant difference between this assumption and the issuer's recent experience. (AS 2501.16) Financial statement audit only | AS 2501.16 | Significant risk |
| 2 | Business Combinations | During the year the issuer acquired a business and engaged a specialist to assist it in determining the fair values of certain acquired intangible assets using various significant assumptions. The following deficiency was identified: · The firm used an auditor-employed specialist to evaluate a significant assumption developed by the company's specialist. The firm did not identify that the auditor-employed specialist did not perform any procedures to evaluate this assumption. (AS 1105.A8b; AS 1201.C6 and .C7) Financial statement audit only | AS 1105.A8b; AS 1201.C6; AS 1201.C7 | Significant risk |
| 3 | Business Combinations | During the year the issuer acquired a business and engaged a specialist to assist it in determining the fair values of certain acquired intangible assets using various significant assumptions. The following deficiency was identified: · The firm did not perform procedures beyond inquiring of management to evaluate the reasonableness of certain other significant assumptions developed by the company's specialist or developed by the issuer. (AS 1105.A8b; AS 2501.16) Financial statement audit only | AS 1105.A8b; AS 2501.16 | Significant risk |
| 4 | Business Combinations | The firm did not identify and evaluate the issuer's omission of certain disclosures required under FASB ASC Topic 805 and FASB ASC Topic 820 related to certain assets acquired. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 | Significant risk |
Issuer K4 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Business Combinations | During the year the issuer acquired a business and engaged a specialist 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 procedures beyond inquiring of management to evaluate the reasonableness of certain significant assumptions developed by the issuer. (AS 2501.16) Financial statement audit only | AS 2501.16 | |
| 2 | Business Combinations | During the year the issuer acquired a business and engaged a specialist 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 acquired assets the firm used the company's specialist's valuation report as audit evidence without performing procedures to evaluate the work of the company's specialist. (AS 1105.A6-.A10; AS 2501.07) Financial statement audit only | AS 1105.A10; AS 1105.A6; AS 1105.A7; AS 1105.A8; AS 1105.A9; AS 2501.7 | |
| 3 | Business Combinations | The firm did not perform procedures to test certain other assets acquired and liabilities assumed beyond tracing these amounts to the general ledger of the acquired business. (AS 2301.08; AS 2501.07) Financial statement audit only | AS 2301.8; AS 2501.7 | |
| 4 | Business Combinations | The firm did not identify and evaluate the issuer's (1) omission of and (2) misstatements in certain disclosures required under FASB ASC Topic 805 and/or FASB ASC Topic 820. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 |
Issuer L3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Business Combinations | During the year the issuer acquired a business and engaged a specialist to assist it in determining the fair value of an acquired intangible asset using various significant assumptions. The following deficiency was identified: · The firm did not sufficiently evaluate the reasonableness of certain significant assumptions developed by the issuer because it did not (1) take into account the issuer's intent and ability to carry out these assumptions (2) take into account changes in conditions or events affecting the issuer and/or (3) evaluate significant differences between the assumptions and the issuer's historical financial information. (AS 2501.16 and .17) Financial statement audit only | AS 2501.16; AS 2501.17 | |
| 2 | Business Combinations | During the year the issuer acquired a business and engaged a specialist to assist it in determining the fair value of an acquired intangible asset using various significant assumptions. The following deficiency was identified: · The firm did not perform any procedures to evaluate the reasonableness of certain other significant assumptions developed by the company's specialist or developed by the issuer. (AS 1105.A8b; AS 2501.16) Financial statement audit only | AS 1105.A8b; AS 2501.16 | |
| 3 | Business Combinations | During the year the issuer acquired a business and engaged a specialist to assist it in determining the fair value of an acquired intangible asset using various significant assumptions. The following deficiency was identified: · The firm did not test the accuracy and completeness of historical financial information produced by the issuer that (1) the firm used in evaluating the reasonableness of certain of these assumptions developed by the issuer and (2) was used by the company's specialist to develop another of these assumptions. (AS 1105.10 and .A8a) Financial statement audit only | AS 1105.10; AS 1105.A8a |
Issuer M1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer recognized certain revenue based on electronic activity. The firm used activity information produced by certain of the issuer's service organizations in its substantive testing of this revenue but did not perform any procedures to test the accuracy and completeness of this information. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 |
Issuer N1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Intangible Assets | The issuer evaluated its intangible assets for possible impairment using various significant assumptions it developed based on the issuer's planned course of action. The firm did not sufficiently evaluate the reasonableness of these significant assumptions because it did not (1) evaluate whether the issuer had a reasonable basis for these assumptions and (2) take into account changes in conditions or events affecting the issuer. Further when evaluating the issuer's ability to carry out its planned course of action the firm performed a sensitivity analysis for these assumptions but did not evaluate the significant differences between the alternative assumptions it used in this analysis and the issuer's recent experience. (AS 2501.16 and .17) Financial statement audit only | AS 2501.16; AS 2501.17 |