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Kost Forer Gabbay & Kasierer
Israel · Ernst & Young Global Limited · Triennially Inspected
- Inspection year
- 2023
- Report date
- 21-Mar-2024
- PCAOB release
- 104-2024-057
- Audits reviewed
- 7
- Audits w/ Part I.A deficiencies
- 3
- Part I.A deficiency rate
- 43%
- Part I.A deficiencies
- 9
- Part I.B deficiencies
- 6
- Report
- View PDF ↗
Deficiencies (9)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A4 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer recognized revenue from multiple sources. The following deficiency was identified: · To test certain revenue the firm selected transactions from a report the issuer prepared and recalculated the related revenue using the key terms underlying the selected transactions as reflected in the report. The firm did not perform any procedures to test the (1) occurrence of the selected transactions and (2) accuracy of the key terms underlying those transactions that the firm used to recalculate the related revenue. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 2 | Revenue | The issuer recognized revenue from multiple sources. The following deficiency was identified: · The firm did not perform any procedures to test certain other revenue. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 3 | Accruals and Other Liabilities | The firm did not perform any procedures to evaluate the reliability of information it obtained from the issuer's website and used to test the valuation of certain liabilities and an unrealized gain. (AS 1105.04 and .06) Financial statement audit only | AS 1105.4; AS 1105.6 | |
| 4 | Journal Entries | 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 procedures to test the selected journal entries because it did not examine the underlying support for the entries and instead limited its procedures to reading the journal entry descriptions. (AS 2401.61) Financial statement audit only | AS 2401.61 |
Issuer B3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm did not identify and evaluate a departure from GAAP related to the issuer's omission of a revenue-related disclosure required by FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 | Significant risk |
| 2 | Revenue | The firm did not perform procedures to test certain revenue beyond determining for a sample of revenue transactions that a contract existed between the issuer and the respective clients and agreeing the respective amounts recorded to invoices the issuer generated. (AS 2301.08) Financial statement audit only | AS 2301.8 | Significant risk |
| 3 | Accounts Receivable and Related Assets | The sample size the firm used in its substantive procedures to test certain receivables and related assets was too small to provide sufficient appropriate audit evidence because the firm did not take into account the relevant factors in determining its sample size including tolerable misstatement for the population the allowable risk of incorrect acceptance and the characteristics of the population. (AS 2315.16 .19 .23 and .23A) Financial statement audit only | AS 2315.16; AS 2315.19; AS 2315.23; AS 2315.23A |
Issuer C2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer operated an e-commerce platform. The following deficiency was identified: · The firm selected for testing a control over revenue that consisted of the issuer's review and approval of third-party invoices including the performance of certain two-way and three-way matches between those invoices and documents and/or information produced by the issuer. The firm did not test the aspects of the control related to the two-way and three-way matches. (AS 2201.42 and .44) ICFR audit only | AS 2201.42; AS 2201.44 | |
| 2 | Revenue | The issuer operated an e-commerce platform. The following deficiency was identified: · The firm selected for testing another control over revenue that consisted of the issuer's review and approval of certain changes the issuer made to data in its system that affected revenue recognition. The firm identified a deficiency in the design and operating effectiveness of this control. The firm identified and tested a compensating control that it believed would mitigate the deficiency. The firm did not identify that the other control did not address the appropriateness of changes made by authorized personnel. (AS 2201.68) ICFR audit only | AS 2201.68 |