- Inspection year
- 2023
- Report date
- 22-Aug-2024
- PCAOB release
- 104-2024-132
- Audits reviewed
- 5
- Audits w/ Part I.A deficiencies
- 5
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 10
- Part I.B deficiencies
- 7
- Report
- View PDF ↗
Deficiencies (10)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A4 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm selected a sample of transactions to test certain revenue. For certain of the sampled transactions the firm did not perform procedures to evaluate whether (1) the issuer met its performance obligations before revenue was recognized and (2) the transaction prices used to recognize revenue were appropriate. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 2 | Inventory | The issuer held inventory at multiple locations. Inventory counts were performed subsequent to year end for each location. The firm obtained an issuer-prepared inventory roll-back analysis to perform tests of intervening transactions. The following deficiency was identified: · To test the completeness of intervening transactions related to inventory purchases for certain inventory the firm selected inventory purchases from bank statements and certain general ledger accounts that exceeded certain monetary thresholds. The firm did not perform any procedures to address the risk related to the completeness of inventory purchases below those thresholds. (AS 1105.27; AS 2510.12) Financial statement audit only | AS 1105.27; AS 2510.12 | |
| 3 | Inventory | The issuer held inventory at multiple locations. Inventory counts were performed subsequent to year end for each location. The firm obtained an issuer-prepared inventory roll-back analysis to perform tests of intervening transactions. The following deficiency was identified: · The firm did not perform any procedures to test the completeness of intervening transactions related to sales of that inventory. (AS 2501.12) Financial statement audit only | AS 2501.12 | |
| 4 | Inventory | The issuer held inventory at multiple locations. Inventory counts were performed subsequent to year end for each location. The firm obtained an issuer-prepared inventory roll-back analysis to perform tests of intervening transactions. The following deficiency was identified: · For certain of the above inventory the firm did not perform any procedures to test the completeness of the intervening transactions unrelated to purchases or sales. (AS 2510.12) Financial statement audit only | AS 2510.12 |
Issuer B3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer used an information technology (IT) system to process certain revenue transactions. The firm's approach to testing revenue included reliance on certain IT change management controls over certain issuer-produced information used in the firm's substantive procedures. The firm did not perform procedures to test the completeness of the information that the firm used to test these IT change management controls. (AS 1105.10) Financial statement audit only | AS 1105.10 | |
| 2 | Revenue | The issuer used an information technology (IT) system to process certain revenue transactions. The firm's approach to testing revenue included reliance on certain IT change management controls over certain issuer-produced information used in the firm's substantive procedures. The issuer recognized several types of revenue. To test one type of revenue the firm performed a substantive analytical procedure using sales data produced by the issuer's system. The firm did not perform procedures to test or test any controls over the accuracy and completeness of that data. (AS 2305.16) Financial statement audit only | AS 2305.16 | |
| 3 | Revenue | The issuer used an information technology (IT) system to process certain revenue transactions. The firm's approach to testing revenue included reliance on certain IT change management controls over certain issuer-produced information used in the firm's substantive procedures. The firm selected a sample of transactions to test another type of revenue. The firm did not perform procedures to test or test any controls over the accuracy and completeness of certain issuer-prepared sales data that was used in testing the selected transactions. (AS 1105.10) Financial statement audit only | AS 1105.10 |
Issuer C1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm did not identify and evaluate a departure from GAAP related to the issuer's omission of a disclosure related to revenue. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 |
Issuer D1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Common Shares | The issuer issued shares as part of a stock offering that included contingent rights. The firm did not evaluate whether the contingent rights were appropriately accounted for in conformity with FASB ASC Topic 815 Derivatives and Hedging. (AS 2301.08 and .11) Financial statement audit only | AS 2301.8; AS 2301.11 | Significant risk |
Issuer E1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm did not perform procedures to evaluate whether the issuer met its performance obligations before certain revenue from related parties was recognized. (AS 2410.17) Financial statement audit only | AS 2410.17 |