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PricewaterhouseCoopers LLP
United States · PricewaterhouseCoopers International Limited · Annually Inspected
- Inspection year
- 2023
- Report date
- 23-May-2024
- PCAOB release
- 104-2024-088
- Audits reviewed
- 57
- Audits w/ Part I.A deficiencies
- 10
- Part I.A deficiency rate
- 18%
- Part I.A deficiencies
- 30
- Part I.B deficiencies
- 7
- Report
- View PDF ↗
Deficiencies (30)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Intangible Assets | The firm selected for testing a control that included the issuer's review of its disclosures related to revenue intangible assets and segment reporting. The firm did not identify and test any controls over the accuracy and completeness of the data and reports that the control owner used in the operation of this control for these disclosures. (AS 2201.39) In connection with our review the issuer reevaluated its controls over its disclosures and concluded that a material weakness existed that had not been previously identified. The issuer subsequently revised its report on ICFR to reflect this material weakness and the firm modified its opinion on the effectiveness of the issuer's ICFR to express an adverse opinion and reissued its report. Both financial statement and ICFR audits | AS 2201.39 | Incorrect opinion |
| 2 | Intangible Assets | The firm used certain of these data and reports in its substantive testing of these disclosures but did not perform any procedures to test or test any controls over the accuracy and completeness of these data and reports. (AS 1105.10) In connection with our review the issuer reevaluated its controls over its disclosures and concluded that a material weakness existed that had not been previously identified. The issuer subsequently revised its report on ICFR to reflect this material weakness and the firm modified its opinion on the effectiveness of the issuer's ICFR to express an adverse opinion and reissued its report. Both financial statement and ICFR audits | AS 1105.10 | Incorrect opinion |
Issuer B8 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Business Combinations | The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. During the year the issuer acquired a business. The acquired assets primarily consisted of oil and gas properties that had oil and gas reserves assigned. The issuer used company-employed specialists to estimate the issuer's oil and gas reserves that were used in the (1) valuation of the acquired oil and gas properties and (2) calculation of depletion expense for these acquired oil and gas properties. The issuer determined the fair value of the acquired oil and gas properties based on discounted cash flows it developed using various assumptions including future production volumes. The company's specialists used financial and non-financial data produced by the issuer and assumptions developed by the issuer or the company's specialists to estimate the oil and gas reserves underlying the future production volumes. The following deficiencies were identified: · The firm selected for testing a control that included the issuer's review of the future production volume assumptions. In evaluating the design of this control the firm did not identify that the control owner did not evaluate the methods assess the accuracy and completeness of the non-financial data and evaluate the reasonableness of the non-financial assumptions used by the company's specialists. (AS 2201.42) Both financial statement and ICFR audits | AS 2201.42 | Significant risk |
| 2 | Business Combinations | The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. During the year the issuer acquired a business. The acquired assets primarily consisted of oil and gas properties that had oil and gas reserves assigned. The issuer used company-employed specialists to estimate the issuer's oil and gas reserves that were used in the (1) valuation of the acquired oil and gas properties and (2) calculation of depletion expense for these acquired oil and gas properties. The issuer determined the fair value of the acquired oil and gas properties based on discounted cash flows it developed using various assumptions including future production volumes. The company's specialists used financial and non-financial data produced by the issuer and assumptions developed by the issuer or the company's specialists to estimate the oil and gas reserves underlying the future production volumes. The following deficiencies were identified: · The firm did not perform procedures to test or sufficiently test controls over the accuracy and completeness of the non-financial data used by the company's specialists. (AS 1105.A8a) Both financial statement and ICFR audits | AS 1105.A8a | Significant risk |
| 3 | Business Combinations | The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. During the year the issuer acquired a business. The acquired assets primarily consisted of oil and gas properties that had oil and gas reserves assigned. The issuer used company-employed specialists to estimate the issuer's oil and gas reserves that were used in the (1) valuation of the acquired oil and gas properties and (2) calculation of depletion expense for these acquired oil and gas properties. The issuer determined the fair value of the acquired oil and gas properties based on discounted cash flows it developed using various assumptions including future production volumes. The company's specialists used financial and non-financial data produced by the issuer and assumptions developed by the issuer or the company's specialists to estimate the oil and gas reserves underlying the future production volumes. The following deficiencies were identified: · The firm did not evaluate the reasonableness of the significant future production volume assumptions beyond comparing these assumptions to historical production volume information from the acquired business. (AS 1105.A8b) Both financial statement and ICFR audits | AS 1105.A8b | Significant risk |
| 4 | Business Combinations | The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. During the year the issuer acquired a business. The acquired assets primarily consisted of oil and gas properties that had oil and gas reserves assigned. The issuer used company-employed specialists to estimate the issuer's oil and gas reserves that were used in the (1) valuation of the acquired oil and gas properties and (2) calculation of depletion expense for these acquired oil and gas properties. The issuer determined the fair value of the acquired oil and gas properties based on discounted cash flows it developed using various assumptions including future production volumes. The company's specialists used financial and non-financial data produced by the issuer and assumptions developed by the issuer or the company's specialists to estimate the oil and gas reserves underlying the future production volumes. The following deficiencies were identified: · The firm did not evaluate the reasonableness of the significant non-financial assumptions that were developed by the company's specialists or the issuer and used by the company's specialists to develop the future production volumes. (AS 1105.A8b; AS 2501.16) Both financial statement and ICFR audits | AS 1105.A8b; AS 2501.16 | Significant risk |
| 5 | Business Combinations | The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. During the year the issuer acquired a business. The acquired assets primarily consisted of oil and gas properties that had oil and gas reserves assigned. The issuer used company-employed specialists to estimate the issuer's oil and gas reserves that were used in the (1) valuation of the acquired oil and gas properties and (2) calculation of depletion expense for these acquired oil and gas properties. The issuer determined the fair value of the acquired oil and gas properties based on discounted cash flows it developed using various assumptions including future production volumes. The company's specialists used financial and non-financial data produced by the issuer and assumptions developed by the issuer or the company's specialists to estimate the oil and gas reserves underlying the future production volumes. The following deficiencies were identified: · The firm did not perform any procedures beyond inquiry to evaluate whether the methods used by the company's specialists were appropriate under the circumstances. (AS 1105.A8c) Both financial statement and ICFR audits | AS 1105.A8c | Significant risk |
| 6 | Oil and Gas Properties | The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. During the year the issuer acquired a business. The acquired assets primarily consisted of oil and gas properties that had oil and gas reserves assigned. The issuer used company-employed specialists to estimate the issuer's oil and gas reserves that were used in the (1) valuation of the acquired oil and gas properties and (2) calculation of depletion expense for these acquired oil and gas properties. The issuer recorded depletion expense for the acquired oil and gas properties using the oil and gas reserves that the company's specialists estimated using financial and non-financial data produced by the issuer and assumptions developed by the issuer or the company's specialists. The following deficiencies were identified: · The firm did not perform procedures to test or test any controls over the accuracy and completeness of the financial and non-financial data used by the company's specialists. (AS 1105.A8a) Both financial statement and ICFR audits | AS 1105.A8a | |
| 7 | Oil and Gas Properties | The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. During the year the issuer acquired a business. The acquired assets primarily consisted of oil and gas properties that had oil and gas reserves assigned. The issuer used company-employed specialists to estimate the issuer's oil and gas reserves that were used in the (1) valuation of the acquired oil and gas properties and (2) calculation of depletion expense for these acquired oil and gas properties. The issuer recorded depletion expense for the acquired oil and gas properties using the oil and gas reserves that the company's specialists estimated using financial and non-financial data produced by the issuer and assumptions developed by the issuer or the company's specialists. The following deficiencies were identified: · The firm did not evaluate the reasonableness of the significant financial and non-financial assumptions that were developed by the company's specialists or the issuer and used by the company's specialists to develop the future production volumes. (AS 1105.A8b; AS 2501.16) Both financial statement and ICFR audits | AS 1105.A8b; AS 2501.16 | |
| 8 | Oil and Gas Properties | The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. During the year the issuer acquired a business. The acquired assets primarily consisted of oil and gas properties that had oil and gas reserves assigned. The issuer used company-employed specialists to estimate the issuer's oil and gas reserves that were used in the (1) valuation of the acquired oil and gas properties and (2) calculation of depletion expense for these acquired oil and gas properties. The issuer recorded depletion expense for the acquired oil and gas properties using the oil and gas reserves that the company's specialists estimated using financial and non-financial data produced by the issuer and assumptions developed by the issuer or the company's specialists. The following deficiencies were identified: · The firm did not evaluate whether the methods used by the company's specialists were appropriate under the circumstances. (AS 1105.A8c) Both financial statement and ICFR audits | AS 1105.A8c |
Issuer C3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | Certain of the issuer's revenue arrangements included multiple performance obligations. The issuer allocated the total transaction price for each of these arrangements to the separate performance obligations based on the issuer's estimate of the relative standalone selling prices. The following deficiencies were identified: · The firm did not identify and test any controls over the issuer's determination of the standalone selling prices. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 2 | Revenue | Certain of the issuer's revenue arrangements included multiple performance obligations. The issuer allocated the total transaction price for each of these arrangements to the separate performance obligations based on the issuer's estimate of the relative standalone selling prices. The following deficiencies were identified: · The firm did not perform any substantive procedures to evaluate the reasonableness of the standalone selling prices that the issuer used to record revenue. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 | |
| 3 | Revenue | Certain of the issuer's revenue arrangements included multiple performance obligations. The issuer allocated the total transaction price for each of these arrangements to the separate performance obligations based on the issuer's estimate of the relative standalone selling prices. The following deficiencies were identified: · The firm did not perform any substantive procedures to evaluate certain contractual terms and conditions that could affect the issuer's determination of the duration of certain contracts and the related revenue recognition. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 |
Issuer D3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | Certain of the issuer's revenue arrangements included multiple performance obligations. The issuer allocated the total transaction price for each of these arrangements to the separate performance obligations based on the issuer's estimate of the relative standalone selling prices. The following deficiencies were identified: · The firm selected for testing a control that included the issuer's review of certain contracts under these types of arrangements for appropriate revenue recognition. The firm did not identify that the control was not designed to address whether the issuer considered all reasonably available information when estimating the standalone selling prices. (AS 2201.42) Both financial statement and ICFR audits | AS 2201.42 | |
| 2 | Revenue | Certain of the issuer's revenue arrangements included multiple performance obligations. The issuer allocated the total transaction price for each of these arrangements to the separate performance obligations based on the issuer's estimate of the relative standalone selling prices. The following deficiencies were identified: · The firm did not evaluate whether the methods that the issuer used to estimate the standalone selling prices maximized the use of observable inputs in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2501.10) Both financial statement and ICFR audits | AS 2501.10 | |
| 3 | Revenue | Certain of the issuer's revenue arrangements included multiple performance obligations. The issuer allocated the total transaction price for each of these arrangements to the separate performance obligations based on the issuer's estimate of the relative standalone selling prices. The following deficiencies were identified: · The firm did not evaluate whether the methods that the issuer used to determine the effect of changes in the transaction price after contract inception were in conformity with FASB ASC Topic 606 beyond observing that certain changes were approved. (AS 2501.10) Both financial statement and ICFR audits | AS 2501.10 |
Issuer E7 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Inventory | The issuer used an information-technology (IT) system to initiate process and record transactions related to inventory at one business unit. In its testing of controls over this inventory the firm tested various automated and IT-dependent manual controls that used data and reports generated or maintained by this IT system. As a result of deficiencies in the firm's testing of IT general controls (ITGCs) the firm's testing of these automated and IT-dependent controls was not sufficient. (AS 2201.46) Both financial statement and ICFR audits | AS 2201.46 | |
| 2 | Inventory | The issuer used an information-technology (IT) system to initiate process and record transactions related to inventory at one business unit. In its testing of controls over this inventory the firm tested various automated and IT-dependent manual controls that used data and reports generated or maintained by this IT system. · With respect to change management the firm selected for testing a control over the issuer's review of changes to the production environment for this IT system. The firm did not test the aspects of this control that addressed whether unauthorized changes could be made directly to the production environment. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 3 | Inventory | The issuer used an information-technology (IT) system to initiate process and record transactions related to inventory at one business unit. In its testing of controls over this inventory the firm tested various automated and IT-dependent manual controls that used data and reports generated or maintained by this IT system. · With respect to user access the firm selected for testing a control that consisted of the issuer's periodic review of user access to this IT system. The firm did not evaluate the specific review procedures that the control owners performed to determine whether previously granted privileged access continued to be appropriate. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 4 | Inventory | The issuer performed cycle counts of this inventory and used its IT system to determine the frequency with which the items should be counted by assigning a count designation to each inventory item. The following additional deficiencies were identified: · The firm selected for testing a control over the issuer's review of whether a count designation was assigned to each inventory item. The firm identified a deviation in the operation of this control but did not evaluate the effect of this deviation on the operating effectiveness of the control. (AS 2201.48) Both financial statement and ICFR audits | AS 2201.48 | |
| 5 | Inventory | The issuer performed cycle counts of this inventory and used its IT system to determine the frequency with which the items should be counted by assigning a count designation to each inventory item. The following additional deficiencies were identified: · The firm selected for testing an automated control over the assignment of the count designations but did not test whether the issuer's IT system was properly configured to assign the appropriate count designation to each inventory item. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 6 | Inventory | The issuer performed cycle counts of this inventory and used its IT system to determine the frequency with which the items should be counted by assigning a count designation to each inventory item. The following additional deficiencies were identified: · The firm selected for testing a control that included the issuer's review of the overall cycle-count results. The firm did not test the aspect of this control that addressed whether inventory counts were performed in accordance with the designated count frequency. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 7 | Inventory | The issuer performed cycle counts of this inventory and used its IT system to determine the frequency with which the items should be counted by assigning a count designation to each inventory item. The following additional deficiencies were identified: · Due to the deficiencies discussed above the firm did not obtain sufficient appropriate audit evidence that the cycle-count procedures the issuer used for this inventory were sufficiently reliable to produce results substantially the same as those that would have been obtained by a count of all items each year. (AS 2510.11) Both financial statement and ICFR audits | AS 2510.11 |
Issuer F3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Leases | The issuer disclosed that it had certain leases that had been executed by year end but had not yet commenced. The firm did not perform any procedures to evaluate whether any of these leases should have been recorded as right-of-use assets and lease liabilities at year end. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 2 | Leases | To evaluate the issuer's classification of leases as operating or financing the firm tested a sample of current-year lease additions but did not perform any procedures to test the fair values of the underlying assets that the issuer used in determining the leases' classification. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 3 | Leases | The firm used issuer-prepared schedules in its substantive testing of certain of the issuer's lease disclosures but did not perform any procedures to test or test any controls over the accuracy and completeness of these schedules. (AS 1105.10) Financial statement audit only | AS 1105.10 |
Issuer G1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Derivatives | The firm selected for testing a control that consisted of the issuer's validation of the models that the issuer used in the valuation of certain of its investment securities and derivatives. The firm did not evaluate the specific review procedures that the control owners performed to assess the results of the testing of these models. (AS 2201.42 and .44) ICFR audit only | AS 2201.42; AS 2201.44 |
Issuer H1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Intangible Assets | The firm selected for testing a control that consisted of the issuer's quarterly assessment of qualitative and quantitative factors to determine whether indicators of potential impairment of certain intangible assets existed. The firm did not identify that this control was not designed to identify and evaluate certain quantitative indicators of potential impairment. (AS 2201.42) ICFR audit only | AS 2201.42 |
Issuer I1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Asset Retirement Obligations | The issuer used an IT system to develop certain cost estimates related to its asset retirement obligations (ARO). The firm selected for testing an automated control over changes to the configuration of this IT system. The firm identified a deviation in the operation of this control but did not evaluate the effect of this deviation on the operating effectiveness of the control. (AS 2201.48) ICFR audit only | AS 2201.48 |
Issuer J1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Goodwill | The issuer performed its annual analysis of goodwill for potential impairment as of an interim date. The firm did not evaluate an indicator of potential impairment that existed at year end. (AS 2301.08; AS 2810.03) Financial statement audit only | AS 2301.8; AS 2810.3 |