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EY GmbH & Co. KG Wirtschaftspruefungsgesellschaft
Germany · Ernst & Young Global Limited · Triennially Inspected
- Inspection year
- 2022
- Report date
- 26-Apr-2024
- PCAOB release
- 104-2024-069
- Audits reviewed
- 3
- Audits w/ Part I.A deficiencies
- 2
- Part I.A deficiency rate
- 67%
- Part I.A deficiencies
- 7
- Part I.B deficiencies
- 2
- Report
- View PDF ↗
Deficiencies (7)
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 | Receivables | The issuer held receivables at numerous business units. The firm performed procedures to test the existence and valuation of receivables at select business units including sending positive confirmation requests to customers for a sample of receivables using a sampling approach that was based on obtaining a certain level of audit evidence from its other substantive procedures. The following deficiency was identified: ?In determining the extent to which audit procedures should be performed at certain business units the firm did not evaluate whether (1) specific risks of material misstatement existed at these business units and (2) the risks of material misstatement the firm identified for the business units subject to audit procedures also applied to these business units such that in combination these risks presented a reasonable possibility of material misstatement. (AS 2101.11 and .12; AS 2201.B10) Both financial statement and ICFR audits | AS 2101.11; AS 2101.12; AS 2201.B10 | |
| 2 | Receivables | The issuer held receivables at numerous business units. The firm performed procedures to test the existence and valuation of receivables at select business units including sending positive confirmation requests to customers for a sample of receivables using a sampling approach that was based on obtaining a certain level of audit evidence from its other substantive procedures. The following deficiency was identified: ? For positive confirmation requests for which the firm did not receive a response the firm did not perform alternative procedures that provided sufficient appropriate audit evidence that the recorded amounts of the receivables were accurate as of the confirmation date. (AS 2310.31) Both financial statement and ICFR audits | AS 2310.31 | |
| 3 | Receivables | The issuer held receivables at numerous business units. The firm performed procedures to test the existence and valuation of receivables at select business units including sending positive confirmation requests to customers for a sample of receivables using a sampling approach that was based on obtaining a certain level of audit evidence from its other substantive procedures. The following deficiency was identified: ? For certain business units the sample size the firm used was too small to provide sufficient appropriate audit evidence over the receivables because the firm's other substantive procedures did not provide the level of substantive evidence needed to support its sampling approach. (AS 2315.16 .19 .23 and .23A) Both financial statement and ICFR audits | AS 2315.16; AS 2315.19; AS 2315.23; AS 2315.23A | |
| 4 | Significant Estimates | The issuer engaged a specialist to develop certain significant assumptions that the issuer considered in determining a significant estimate. The firm's approach for substantively testing the estimate was to test the issuer's process. The following deficiency was identified: ? The firm did not perform any procedures to evaluate the reasonableness of certain assumptions the specialist and issuer developed that the specialist used to develop the significant assumptions the issuer considered in determining the estimate. (AS 1105.A8b; AS 2501.16) Both financial statement and ICFR audits | AS 1105.A8b; AS 2501.16 | |
| 5 | Significant Estimates | The issuer engaged a specialist to develop certain significant assumptions that the issuer considered in determining a significant estimate. The firm's approach for substantively testing the estimate was to test the issuer's process. The following deficiency was identified: ? The firm did not perform any procedures to test the accuracy and completeness of company-produced data and evaluate the relevance and reliability of certain other data from sources external to the issuer that the specialist used to develop the significant assumptions the issuer considered in determining the estimate. (AS 1105.A8a) Both financial statement and ICFR audits | AS 1105.A8a |
Issuer B2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm's approach for substantively testing revenue consisted primarily of performing a software-assisted analysis to test the relationships among revenue accounts receivable and cash receipts. The reliability of the audit evidence obtained from this analysis was dependent upon the firm's testing of cash receipts data underlying the analysis. To test this data the firm selected a sample of cash receipts and compared the amounts to statements generated from the issuer's information technology application used to initiate bank transfers and control its bank accounts. The firm did not perform procedures to test or test any controls over the accuracy and completeness of the system-generated statements that it used to test the cash receipts data. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 2 | Cash | The firm selected for testing a control over the existence of cash that consisted of the reconciliation of cash accounts and the review and investigation of significant reconciling and/or unusual items. The firm did not identify and test any controls over the accuracy and completeness of system-generated statements used in the operation of this control. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 |