- Inspection year
- 2023
- Report date
- 22-Feb-2024
- PCAOB release
- 104-2024-047
- Audits reviewed
- 1
- Audits w/ Part I.A deficiencies
- 1
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 5
- Part I.B deficiencies
- 6
- Report
- View PDF ↗
Deficiencies (5)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A5 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Business Combinations | The firm's internal inspection program inspected this audit and reviewed these areas but did not identify the deficiencies below. During the year the issuer acquired certain businesses and engaged a specialist to assist in determining the fair value of consideration for the acquisitions and certain acquired assets. The firm used an auditor-engaged specialist to assist it with testing the fair value of the consideration for the acquisitions. The following deficiencies were identified: · The firm did not identify that the auditor-engaged specialist did not perform procedures to evaluate the relevance of certain external data the company's specialist used to develop significant assumptions. (AS 1105.A8a; AS 1210.09 and .12) Financial statement audit only | AS 1105.A8a; AS 1210.9; AS 1210.12 | Significant risk |
| 2 | Business Combinations | The firm's internal inspection program inspected this audit and reviewed these areas but did not identify the deficiencies below. During the year the issuer acquired certain businesses and engaged a specialist to assist in determining the fair value of consideration for the acquisitions and certain acquired assets. The firm used an auditor-engaged specialist to assist it with testing the fair value of the consideration for the acquisitions. The following deficiencies were identified: · The firm did not perform sufficient procedures to evaluate the reasonableness of certain significant assumptions because it limited its procedures to evaluating the consistency of the assumptions with industry information. Further the firm did not evaluate significant differences between the assumptions and the industry information. (AS 1105.A8b) Financial statement audit only | AS 1105.A8b | Significant risk |
| 3 | Accounts Receivable | The firm's internal inspection program inspected this audit and reviewed these areas but did not identify the deficiencies below. The firm sent positive confirmation requests to certain customers. The following deficiencies were identified: · The firm did not perform alternative procedures for certain positive confirmation requests for which it did not receive a response. (AS 2310.31) Unrelated to our review the issuer reevaluated its accounting for accounts receivable and concluded that a material misstatement existed that had not been previously identified. The issuer subsequently corrected this misstatement in a restatement of its financial statements and the firm revised and reissued its report on the financial statements. Financial statement audit only | AS 2310.31 | |
| 4 | Accounts Receivable | The firm's internal inspection program inspected this audit and reviewed these areas but did not identify the deficiencies below. The firm sent positive confirmation requests to certain customers. The following deficiencies were identified: · For certain confirmations that were returned with exceptions the firm did not evaluate the nature of those exceptions. Further for certain other confirmations that were returned with exceptions the firm did not perform alternative procedures that provided sufficient appropriate audit evidence that recorded amounts of accounts receivable existed and were accurate at the confirmation date. (AS 2310.33) Unrelated to our review the issuer reevaluated its accounting for accounts receivable and concluded that a material misstatement existed that had not been previously identified. The issuer subsequently corrected this misstatement in a restatement of its financial statements and the firm revised and reissued its report on the financial statements. Financial statement audit only | AS 2310.33 | |
| 5 | Journal Entries | The firm's internal inspection program inspected this audit and reviewed these areas but did not identify the deficiencies below. The firm identified fraud criteria for journal entries and obtained a listing of all journal entries that met the criteria. The firm did not perform sufficient substantive procedures to test those journal entries because it limited its procedures to certain journal entries without having an appropriate rationale for limiting its procedures to those journal entries. Further the firm did not examine the underlying support for the selected journal entries and instead limited its procedures to obtaining the details of the journal entries reading the journal entry descriptions and/or inquiring of management. (AS 2401.61) Financial statement audit only | AS 2401.61 |