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Grant Thornton LLP
United States · Grant Thornton International Limited · Annually Inspected
- Inspection year
- 2023
- Report date
- 23-May-2024
- PCAOB release
- 104-2024-084
- Audits reviewed
- 28
- Audits w/ Part I.A deficiencies
- 15
- Part I.A deficiency rate
- 54%
- Part I.A deficiencies
- 51
- Part I.B deficiencies
- 13
- Report
- View PDF ↗
Deficiencies (51)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A10 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Inventory | The issuer recorded transactions related to revenue and inventory at numerous business units. To address the risks of material misstatement related to revenue for the issuer's business units the firm selected for testing entity-level controls that consisted of the issuer's (1) review and approval of its business unit and consolidated budgets and (2) comparisons of the business unit budgets and prior-period results to actual results. The firm did not evaluate the specific review procedures that the control owners performed to assess items identified for follow up and the procedures to determine whether those items were appropriately resolved. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 2 | Inventory | With respect to revenue and inventory for certain business units that were subject to less extensive audit procedures the following deficiencies were identified: · In determining the extent to which audit procedures should be performed the firm did not evaluate (1) the materiality of these business units in the current year and (2) whether the risks of material misstatement including the fraud risk related to this revenue that the firm identified for the business units subject to more extensive audit procedures also applied to these business units. (AS 2101.11 and .12; AS 2201.B10) Both financial statement and ICFR audits | AS 2101.11; AS 2101.12; AS 2201.B10 | |
| 3 | Inventory | With respect to revenue and inventory for certain business units that were subject to less extensive audit procedures the following deficiencies were identified: · The firm did not perform any substantive procedures to test revenue and inventory for these business units. (AS 2301.08 and .13) Both financial statement and ICFR audits | AS 2301.8; AS 2301.13 | |
| 4 | Inventory | With respect to Revenue and Inventory at one of the issuer's business units: The firm identified a significant deficiency related to an information-technology (IT) system that the issuer used to record this revenue and inventory. The firm identified the entity-level controls discussed above as compensating controls that it believed would mitigate this significant deficiency but did not sufficiently test those controls. (AS 2201.68) Both financial statement and ICFR audits | AS 2201.68 | |
| 5 | Inventory | With respect to Inventory at one of the issuer's business units: The firm selected for testing a control that included the issuer's annual physical inventory count of this inventory. The following deficiencies were identified: · The firm did not test the aspects of this control that addressed whether an accurate and complete count had occurred. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 6 | Inventory | With respect to Inventory at one of the issuer's business units: The firm selected for testing a control that included the issuer's annual physical inventory count of this inventory. The following deficiencies were identified: · The firm did not evaluate whether the issuer had appropriately investigated and resolved differences between the physical counts and the quantities recorded in the issuer's inventory system. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 7 | Inventory | With respect to Inventory at one of the issuer's business units: The firm selected for testing a control that included the issuer's annual physical inventory count of this inventory. The following deficiencies were identified: · The firm did not evaluate whether the IT-dependent aspects of this control would be effective given the significant deficiency related to this IT system. (AS 2201.46) Both financial statement and ICFR audits | AS 2201.46 | |
| 8 | Inventory | With respect to Inventory at one of the issuer's business units: The firm did not perform sufficient substantive procedures to test the existence of this inventory because the firm did not assess the effectiveness of the methods the issuer used to conduct its inventory counts. (AS 2510.09) Both financial statement and ICFR audits | AS 2510.9 | |
| 9 | Inventory | With respect to Inventory at another of the issuer's business units: The issuer performed cycle counts of this inventory and the issuer's cycle-count policy required this inventory to be counted at specific frequencies during the year. The firm selected for testing a control that consisted of the issuer's cycle-count procedures including the issuer's reviews of cycle-count results. The firm did not test the aspects of this control that addressed whether inventory counts were performed in accordance with the issuer's designated count frequency in its cycle-count policy. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 10 | Inventory | With respect to Inventory at another of the issuer's business units: The issuer performed cycle counts of this inventory and the issuer's cycle-count policy required this inventory to be counted at specific frequencies during the year. The firm selected for testing a control that consisted of the issuer's cycle-count procedures including the issuer's reviews of cycle-count results. The firm did not evaluate the specific review procedures that the control owners performed to assess whether the cycle-count results for this inventory were accurate. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 |
Issuer B9 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Contract Assets | The issuer recognized certain revenue (1) at a point in time from contracts based on the date when the delivery of products occurred and (2) over time from contracts in which it had an enforceable right to payment for inventory that did not have an alternative use based on the receipt of products into inventory. With respect to product revenue recognized over time for three of the issuer's business units: · The firm selected for testing controls that consisted of the issuer's review of adjustments to revenue for inventory on hand with no alternative use including the review of the accuracy and completeness of the information used in the inventory adjustment analysis. The firm did not evaluate the review procedures that the control owners performed including the procedures to identify items for follow up and the procedures to determine whether those items were appropriately resolved. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 2 | Contract Assets | The issuer recognized certain revenue (1) at a point in time from contracts based on the date when the delivery of products occurred and (2) over time from contracts in which it had an enforceable right to payment for inventory that did not have an alternative use based on the receipt of products into inventory. With respect to product revenue recognized over time for three of the issuer's business units: · The firm did not perform any substantive procedures to test or sufficiently test controls over the accuracy and completeness of certain information that the firm used in its testing of these revenue adjustments. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 3 | Contract Assets | The issuer recognized certain revenue (1) at a point in time from contracts based on the date when the delivery of products occurred and (2) over time from contracts in which it had an enforceable right to payment for inventory that did not have an alternative use based on the receipt of products into inventory. With respect to product revenue recognized over time for three of the issuer's business units: · The sample sizes the firm used in its substantive procedures to test these revenue adjustments were too small to provide sufficient appropriate audit evidence because (1) these procedures were designed based on a level of control reliance that was not supported due to the deficiency in the firm's control testing discussed above and (2) in determining the samples sizes the firm used a level of inherent risk that was lower than what it had assessed. (AS 2301.16 .18 .37 and .42; AS 2315.19 .23 and .23A) Both financial statement and ICFR audits | AS 2301.16; AS 2301.18; AS 2301.37; AS 2301.42; AS 2315.19; AS 2315.23; AS 2315.23A | |
| 4 | Contract Assets | With respect to product revenue for two of these business units: · The firm selected for testing a control that consisted of the issuer's review of the accuracy and completeness of revenue data but did not test the aspect of this control that addressed the accuracy of these data. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 5 | Contract Assets | With respect to product revenue for two of these business units: · The firm's testing of an automated control over the generation of customer invoices was not sufficient because the firm did not test the configuration or programming of this control or perform other procedures to test this control that would have provided sufficient appropriate audit evidence that this control was designed and operating effectively. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 6 | Contract Assets | With respect to product revenue for the third business unit: · The firm did not identify and test any controls over the accuracy of the prices and quantities that the issuer used to record revenue. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 7 | Contract Assets | With respect to product revenue for the third business unit: · The sample sizes the firm used in its substantive procedures to test this revenue were too small to provide sufficient appropriate audit evidence because these procedures were designed based on a level of control reliance that was not supported due to the deficiency in the firm's control testing discussed above. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A) Both financial statement and ICFR audits | AS 2301.16; AS 2301.18; AS 2301.37; AS 2315.19; AS 2315.23; AS 2315.23A | |
| 8 | Segment Reporting | The firm selected for testing a control that consisted of the issuer's review of financial information by segment. The firm did not evaluate the specific review procedures that the control owners performed to assess whether the allocation of the financial information for one of the issuer's business units among certain reportable segments was accurate. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 9 | Segment Reporting | The firm used the issuer's financial information by reportable segment in its substantive testing of the issuer's segment disclosure but did not perform any procedures to test or sufficiently test controls over the accuracy of the issuer's allocation of the financial information for one of its business units among certain reportable segments. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 |
Issuer C7 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer recognized revenue from certain contracts over time using an input method based on labor hours incurred. The following deficiencies were identified: · The firm did not perform any substantive procedures to evaluate the reasonableness of the estimated labor hours to complete contracts that the firm selected for testing beyond inquiring of project managers. (AS 2501.16) Financial statement audit only | AS 2501.16 | |
| 2 | Revenue | The issuer recognized revenue from certain contracts over time using an input method based on labor hours incurred. The following deficiencies were identified: · For certain of this revenue the firm did not perform any substantive procedures to test whether the issuer satisfied its performance obligations before recognizing revenue. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 3 | Revenue | The issuer recognized revenue from certain contracts over time using an input method based on labor hours incurred. The following deficiencies were identified: · The firm identified a misstatement in its testing of this revenue and the issuer concluded that this misstatement represented a control deficiency. The firm did not evaluate the severity of the deficiency and the effect on its control risk assessment. (AS 2301.34) Financial statement audit only | AS 2301.34 | |
| 4 | Revenue | The issuer recognized revenue from certain contracts over time using an input method based on labor hours incurred. The following deficiencies were identified: · The sample sizes the firm used in its substantive procedures to test this revenue were too small to provide sufficient appropriate audit evidence because these procedures were designed based on a level of control reliance that was not supported due to the deficiency in the firm's evaluation of the control deficiency discussed above. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A) Financial statement audit only | AS 2301.16; AS 2301.18; AS 2301.37; AS 2315.19; AS 2315.23; AS 2315.23A | |
| 5 | Revenue | The firm used an issuer-prepared schedule in its substantive testing of one of the issuer's revenue disclosures but did not perform any procedures to test or test any controls over the accuracy of this schedule. (AS 1105.10) Financial statement audit only | AS 1105.10 | |
| 6 | Business Combinations | During the year the issuer acquired a business and determined the fair value of certain acquired intangible assets using various assumptions. The firm's approach for substantively testing the fair value of these acquired intangible assets was to develop an independent expectation of the estimate. The following deficiencies were identified: · The firm did not sufficiently evaluate the reasonableness of certain significant assumptions developed by the issuer that the firm also used to develop its independent expectation because its procedures were limited to inquiring of management. (AS 2501.16) Financial statement audit only | AS 2501.16 | |
| 7 | Business Combinations | During the year the issuer acquired a business and determined the fair value of certain acquired intangible assets using various assumptions. The firm's approach for substantively testing the fair value of these acquired intangible assets was to develop an independent expectation of the estimate. The following deficiencies were identified: · The firm did not evaluate the relevance of certain external data that it used to develop its independent expectation. (AS 1105.04 and .06) Financial statement audit only | AS 1105.4; AS 1105.6 |
Issuer D3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Going Concern | The firm selected for testing a control that consisted of the issuer's review of its evaluation of its ability to continue as a going concern. The firm did not evaluate the specific review procedures that the control owner performed to evaluate the reasonableness of management's plans including forecasted cash flows. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | Significant risk |
| 2 | Going Concern | The issuer used forecasted financial information in its evaluation of its ability to continue as a going concern and concluded that the substantial doubt was alleviated by its plans. In evaluating management's plans the firm did not evaluate the relevance and reliability of certain forecasted financial information beyond inquiring of management and comparing certain of this information to market data. (AS 1105.04 and .06; AS 2415.03 08 and .09) Both financial statement and ICFR audits | AS 1105.4; AS 1105.6; AS 2415.3; AS 2415.8; AS 2415.9 | Significant risk |
| 3 | Leases | The firm tested controls that included the issuer's review of forecasts used in its analysis of possible impairment of its operating lease right-of-use assets and determined that they were ineffective because an aspect of these controls was not operating effectively. The firm concluded that this deficiency represented a significant deficiency primarily based on its conclusion that the remaining aspect of these controls was operating effectively. The firm did not sufficiently evaluate whether this deficiency represented a material weakness because in its testing of this remaining aspect the firm did not evaluate the specific review procedures that the control owners performed to assess the reasonableness of certain revenue forecasts that the issuer used in its analysis. (AS 2201.62) Both financial statement and ICFR audits | AS 2201.62 | Significant risk |
Issuer E7 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Accounts Receivable | The issuer initiated and processed transactions related to revenue accounts receivable and inventory at several business units. The firm selected for testing an entity-level control that consisted of the issuer's review of quarterly financial information including revenue accounts receivable and inventory. The firm did not evaluate the specific review procedures that the control owner performed to determine whether items identified for follow up were appropriately resolved. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 2 | Accounts Receivable | The issuer initiated and processed transactions related to revenue accounts receivable and inventory at several business units. The firm selected for testing an entity-level control that consisted of the issuer's review of quarterly financial information including revenue accounts receivable and inventory. The firm did not identify that this entity-level control was not designed to address an identified fraud risk. (AS 2201.42) Both financial statement and ICFR audits | AS 2201.42 | |
| 3 | Accounts Receivable | The sample sizes the firm used in its substantive procedures to test revenue and accounts receivable at certain of the issuer's business units were too small to provide sufficient appropriate audit evidence because these procedures were designed based on a level of control reliance that was not supported due to the deficiencies in the firm's control testing discussed above. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A) Both financial statement and ICFR audits | AS 2301.16; AS 2301.18; AS 2301.37; AS 2315.19; AS 2315.23; AS 2315.23A | |
| 4 | Revenue | The firm used an issuer-prepared schedule in its substantive testing of certain of the issuer's revenue disclosures but did not perform any procedures to test or test any controls over the accuracy of this schedule. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 5 | Inventory | The firm did not perform any substantive procedures to test inventory at certain of the issuer's business units. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 | |
| 6 | Accounts Receivable | To test accounts receivable at one of the issuer's business units the firm performed confirmation procedures for a sample of customer accounts. The firm did not maintain control over the confirmation requests sent to customers. (AS 2310.28) Both financial statement and ICFR audits | AS 2310.28 | |
| 7 | Accounts Receivable | To test accounts receivable at one of the issuer's business units the firm performed confirmation procedures for a sample of customer accounts. The firm did not consider performing procedures to verify the source of responses that were returned by email. (AS 2310.29) Both financial statement and ICFR audits | AS 2310.29 |
Issuer F4 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Inventory | The issuer recorded transactions related to revenue and inventory at numerous business units. The firm selected for testing two entity-level controls that consisted of the issuer's review of financial information including revenue and inventory. For one of these controls the firm did not evaluate the review procedures that the control owners performed including the procedures to identify items for follow up and the procedures to determine whether those items were appropriately resolved. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 2 | Inventory | The issuer recorded transactions related to revenue and inventory at numerous business units. The firm selected for testing two entity-level controls that consisted of the issuer's review of financial information including revenue and inventory. For the other control the firm did not evaluate the specific review procedures that the control owners performed to determine whether items identified for follow up were appropriately resolved. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 3 | Inventory | With respect to certain business units that were subject to less extensive audit procedures the firm did not perform any substantive procedures to test revenue and inventory for these business units. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 | |
| 4 | Inventory | With respect to inventory at certain business units that were subject to more extensive audit procedures the firm did not perform any substantive procedures to test the existence of this inventory. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 |
Issuer G3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer used an information-technology (IT) system to process and record transactions related to revenue at one segment. In its testing of controls over this revenue the firm tested an IT-dependent manual control that used data and reports generated or maintained by this system. As a result of the deficiencies in the firm's testing of IT general controls (ITGCs) discussed below the firm's testing of this IT-dependent manual control was not sufficient. (AS 2201.46) ICFR audit only | AS 2201.46 | |
| 2 | Revenue | The issuer identified segregation of duties conflicts related to individuals who had the ability to both develop and implement changes to this system and implemented controls to monitor these conflicts. The firm identified and tested these controls but did not identify that the individuals that the issuer identified as having the segregation of duties conflicts also had administrative access to the tool that the control owners used to monitor the conflicts. (AS 2201.42 and .44) ICFR audit only | AS 2201.42; AS 2201.44 | |
| 3 | Revenue | The issuer identified segregation of duties conflicts related to individuals who had the ability to both develop and implement changes to this system and implemented controls to monitor these conflicts. The firm did not identify and test any controls over the accuracy and completeness of the reports generated by the tool that the control owners used in the operation of these controls. (AS 2201.39) ICFR audit only | AS 2201.39 |
Issuer H1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Leases | The firm did not perform any substantive procedures to test the issuer's long-lived assets and operating lease right-of-use assets for possible impairment at year end beyond reading an issuer-prepared checklist and inquiring of management. (AS 2301.08) Financial statement audit only | AS 2301.8 |
Issuer I1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Accounts Receivable | The firm did not evaluate certain evidence that indicated that the accounts receivable from one of the issuer's customers may not be fully collectible. (AS 2301.08 and. 11; AS 2810.03) Financial statement audit only | AS 2301.8; AS 2301.11; AS 2810.3 | Significant risk |
Issuer J1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Inventory | Certain of the issuer's inventory was subject to cycle counts and the issuer's cycle-count program required this inventory to be counted at specific frequencies during the year. The firm did not identify and test any controls that addressed whether each inventory item was counted with sufficient frequency in accordance with the issuer's cycle-count program. (AS 2201.39) ICFR audit only | AS 2201.39 |
Issuer K1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Intangible Assets | During the year the issuer identified events indicating that the carrying value of its finite-lived intangible assets may not be recoverable and performed impairment analyses as of various interim dates and at year end. Starting in the second quarter the issuer determined that its impairment analysis should be performed using a single asset group. The firm did not perform any procedures beyond reading an issuer-prepared memorandum to evaluate whether the issuer's change to a single asset group was in conformity with FASB ASC Topic 360 Property Plant and Equipment. (AS 2301.08) Financial statement audit only | AS 2301.8 |
Issuer L1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm did not identify and evaluate the issuer's omission of a required disclosure under FASB ASC Topic 270 Interim Reporting related to the aggregate effect of a year-end adjustment that the issuer recorded in the fourth quarter. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 |
Issuer M1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Going Concern | The firm did not evaluate certain evidence related to conditions and events that existed at or had occurred prior to the issuance of the financial statements that indicated that the issuer may not have the ability to continue as a going concern including the issuer's disclosure that substantial doubt had been raised. (AS 2415.03; AS 2810.03) Financial statement audit only | AS 2415.3; AS 2810.3 |
Issuer N1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Equity | The firm's internal inspection program had inspected this audit and reviewed this area but did not identify the deficiency below. The firm did not identify and evaluate the issuer's omission of required disclosures under FASB ASC Topic 718 Compensation-Stock Compensation related to the employee's requisite service period for certain of the issuer's stock-based compensation plans and the issuer's policy for recognizing forfeitures. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 |
Issuer O1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Statement of Cash Flows | The firm identified that the issuer's net presentation of proceeds from borrowings and the repayments of certain debt was not in conformity with FASB ASC Topic 230 Statement of Cash Flows. The firm did not sufficiently evaluate the effect of this presentation because its assessment was limited to concluding that this presentation would not have a material effect on the financial statements without performing a quantitative analysis of the gross presentation. (AS 2810.17 .30 and .31) Unrelated to our review the issuer reevaluated this presentation and determined that it should be corrected. The issuer did not file an amended Form 10-K or Form 8-K indicating that its previously issued financial statements should not be relied on. Instead the issuer corrected this presentation in a subsequent filing. Financial statement audit only | AS 2810.17; AS 2810.30; AS 2810.31 |