- Inspection year
- 2023
- Report date
- 22-Aug-2024
- PCAOB release
- 104-2024-130
- Audits reviewed
- 2
- Audits w/ Part I.A deficiencies
- 2
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 9
- Part I.B deficiencies
- 4
- 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 A5 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm did not perform any substantive procedures to test certain revenue. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 2 | Debt | To test certain debt the firm selected transactions exceeding a monetary threshold. The firm did not perform procedures to test the remaining population of transactions. (AS 1105.27; AS 2301.08 and .11) Financial statement audit only | AS 1105.27; AS 2301.8; AS 2301.11 | Significant risk |
| 3 | Debt | The firm did not perform procedures to test or identify and test any controls over the accuracy of certain issuer-produced data it used in its substantive procedures. (AS 1105.10) Financial statement audit only | AS 1105.10 | Significant risk |
| 4 | Derivative Liabilities | The issuer engaged a specialist to determine the fair value of its derivative liabilities. The firm did not perform substantive procedures to test the fair value of the derivative liabilities beyond obtaining and reading the valuation report prepared by the company's specialist inquiry of the issuer and performing a sensitivity analysis. Further the firm did not perform any procedures to evaluate the work of the company's specialist. (AS 1105.A6 -.A10; AS 2501.07) Financial statement audit only | AS 1105.A10; AS 1105.A6; AS 1105.A7; AS 1105.A8; AS 1105.A9; AS 2501.7 | Significant risk |
| 5 | Journal Entries | The firm did not consider the characteristics of potentially fraudulent journal entries when identifying and selecting journal entries for testing. Further the firm did not examine the underlying support for the journal entries selected for testing. (AS 2401.61) Financial statement audit only | AS 2401.61 |
Issuer B4 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Intangible Assets | The issuer reported intangible assets at several reporting units and evaluated them for impairment using undiscounted cash flow analyses. The firm's approach to test the issuer's impairment analyses was to test the issuer's process and develop an independent expectation of the undiscounted cash flows for each reporting unit. The following deficiency was identified: · The firm did not perform sufficient procedures to evaluate the reasonableness of certain significant assumptions used by the issuer to develop its undiscounted cash flows because it limited its procedures to evaluating the consistency of the assumptions with historical experience. (AS 2501.16) Financial statement audit only | AS 2501.16 | Significant risk |
| 2 | Intangible Assets | The issuer reported intangible assets at several reporting units and evaluated them for impairment using undiscounted cash flow analyses. The firm's approach to test the issuer's impairment analyses was to test the issuer's process and develop an independent expectation of the undiscounted cash flows for each reporting unit. The following deficiency was identified: · The firm did not perform any procedures to demonstrate it had a reasonable basis for certain assumptions it developed and used to determine its independent expectations. (AS 2501.22) Financial statement audit only | AS 2501.22 | Significant risk |
| 3 | Intangible Assets | The issuer reported intangible assets at several reporting units and evaluated them for impairment using undiscounted cash flow analyses. The firm's approach to test the issuer's impairment analyses was to test the issuer's process and develop an independent expectation of the undiscounted cash flows for each reporting unit. The following deficiency was identified: · The firm did not perform sufficient procedures to evaluate whether the method used by the issuer to develop the impairment analyses was in conformity with FASB ASC Topic 360 Property Plant and Equipment because it did not evaluate whether the carrying values of the reporting unit used by the issuer in its impairment analyses were consistent with the carrying values of the asset group as defined in FASB ASC Topic 360. (AS 2501.10) Financial statement audit only | AS 2501.10 | Significant risk |
| 4 | Journal Entries | The firm did not consider the characteristics of potentially fraudulent journal2501 entries when identifying and selecting journal entries for testing. Further the firm did not examine the underlying support for the journal entries selected for testing. (AS 2401.61) Financial statement audit only | AS 2401.61 |