- Inspection year
- 2023
- Report date
- 21-Mar-2024
- PCAOB release
- 104-2024-060a
- Audits reviewed
- 1
- Audits w/ Part I.A deficiencies
- 1
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 15
- Part I.B deficiencies
- 8
- Report
- View PDF ↗
Deficiencies (15)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A15 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm's internal inspection program inspected this audit and reviewed certain of these areas but did not identify the deficiencies below. To test revenue the firm selected revenue transactions that exceeded a monetary threshold. The following deficiency was identified: · For the selected transactions the firm did not perform any substantive procedures to test whether the issuer's performance obligations had been satisfied when revenue was recognized. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 2 | Revenue | The firm's internal inspection program inspected this audit and reviewed certain of these areas but did not identify the deficiencies below. To test revenue the firm selected revenue transactions that exceeded a monetary threshold. The following deficiency was identified: · The firm did not perform any procedures to test the remaining revenue transactions. (AS 1105.27; AS 2301.08 and .13) Financial statement audit only | AS 1105.27; AS 2301.8; AS 2301.13 | |
| 3 | Revenue | The firm's internal inspection program inspected this audit and reviewed certain of these areas but did not identify the deficiencies below. The firm did not identify and evaluate departures from GAAP related to the issuer's omission of certain disclosures related to revenue that were 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 | |
| 4 | Convertible Debt | The firm's internal inspection program inspected this audit and reviewed certain of these areas but did not identify the deficiencies below. The issuer issued convertible debt during the current and prior years. The following deficiency was identified: · The firm did not perform any procedures to evaluate the issuer's equity classification of and accounting for (1) warrants and (2) embedded conversion options associated with certain convertible debt. (AS 2301.08 and .11) Financial statement audit only | AS 2301.8; AS 2301.11 | Significant risk |
| 5 | Convertible Debt | The firm's internal inspection program inspected this audit and reviewed certain of these areas but did not identify the deficiencies below. The issuer issued convertible debt during the current and prior years. The following deficiency was identified: · The firm did not perform any procedures to test the intrinsic value of the beneficial conversion feature associated with certain convertible debt at the date of issuance. (AS 2301.08 and .11) Financial statement audit only | AS 2301.8; AS 2301.11 | Significant risk |
| 6 | Convertible Debt | The firm's internal inspection program inspected this audit and reviewed certain of these areas but did not identify the deficiencies below. The issuer issued convertible debt during the current and prior years. The following deficiency was identified: · The firm did not perform any procedures to test the amortization of debt discount associated with certain convertible debt. (AS 2301.08 and .11) Financial statement audit only | AS 2301.8; AS 2301.11 | Significant risk |
| 7 | Convertible Debt | The firm's internal inspection program inspected this audit and reviewed certain of these areas but did not identify the deficiencies below. The issuer issued convertible debt during the current and prior years. The following deficiency was identified: · The firm did not identify and evaluate errors related to convertible debt in the issuer's consolidated statement of shareholders' deficit and consolidated statement of cash flows. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 | Significant risk |
| 8 | Convertible Debt | The firm's internal inspection program inspected this audit and reviewed certain of these areas but did not identify the deficiencies below. The issuer issued convertible debt during the current and prior years. The following deficiency was identified: · The firm did not identify and evaluate errors in the issuer's convertible debt disclosures. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 | Significant risk |
| 9 | Convertible Debt | The firm's internal inspection program inspected this audit and reviewed certain of these areas but did not identify the deficiencies below. To test convertible debt the firm's substantive procedures included confirmation of the balances. The following deficiency was identified: · The issuer sent the confirmation requests on behalf of the firm. The firm did not maintain control of the confirmation requests through direct communication with the intended recipients of the confirmation requests. (AS 2310.28) Financial statement audit only | AS 2310.28 | Significant risk |
| 10 | Convertible Debt | The firm's internal inspection program inspected this audit and reviewed certain of these areas but did not identify the deficiencies below. To test convertible debt the firm's substantive procedures included confirmation of the balances. The following deficiency was identified: · The firm received electronic responses to certain confirmation requests. The firm did not consider performing procedures to address the risks associated with electronic responses such as verifying the source and contents of the confirmation responses. (AS 2310.29) Financial statement audit only | AS 2310.29 | Significant risk |
| 11 | Convertible Debt | The firm's internal inspection program inspected this audit and reviewed certain of these areas but did not identify the deficiencies below. To test convertible debt the firm's substantive procedures included confirmation of the balances. The following deficiency was identified: · For certain of the confirmation requests that were not returned the firm did not perform alternative procedures that provided sufficient appropriate audit evidence that the recorded amounts of the convertible debt were accurate as of the confirmation date. (AS 2310.31) Financial statement audit only | AS 2310.31 | Significant risk |
| 12 | Convertible Debt | The firm's internal inspection program inspected this audit and reviewed certain of these areas but did not identify the deficiencies below. To test convertible debt the firm's substantive procedures included confirmation of the balances. The following deficiency was identified: · For certain other confirmation requests that were not returned the firm did not perform alternative procedures. (AS 2310.31) Financial statement audit only | AS 2310.31 | Significant risk |
| 13 | Derivative Liabilities | The firm's internal inspection program inspected this audit and reviewed certain of these areas but did not identify the deficiencies below. The issuer reported derivative liabilities at fair value. The firm's approach for testing the fair value of the derivative liabilities was to test the issuer's process. The following deficiency was identified: · The firm did not evaluate whether the model the issuer used to develop the fair value was in conformity with the applicable financial reporting framework and appropriate for the nature of the related account. (AS 2501.10) Financial statement audit only | AS 2501.10 | Significant risk |
| 14 | Derivative Liabilities | The firm's internal inspection program inspected this audit and reviewed certain of these areas but did not identify the deficiencies below. The issuer reported derivative liabilities at fair value. The firm's approach for testing the fair value of the derivative liabilities was to test the issuer's process. The following deficiency was identified: · The firm did not perform any substantive procedures to evaluate the reasonableness of a significant assumption developed by the issuer. (AS 2501.16) Financial statement audit only | AS 2501.16 | Significant risk |
| 15 | Journal Entries | The firm's internal inspection program inspected this audit and reviewed certain of 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 testing to those journal entries. (AS 2401.61) Financial statement audit only | AS 2401.61 |