- Inspection year
- 2023
- Report date
- 27-Sep-2024
- PCAOB release
- 104-2024-154
- Audits reviewed
- 5
- Audits w/ Part I.A deficiencies
- 5
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 16
- Part I.B deficiencies
- 10
- Report
- View PDF ↗
Deficiencies (16)
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 | Digital Assets | The issuer earned revenue through cryptocurrency transactions and received digital assets in return. The following deficiency was identified: · The firm did not perform procedures to evaluate the relevance and/or reliability of external information it used to test revenue and digital assets. (AS 1105.04 and .06) Financial statement audit only | AS 1105.4; AS 1105.6 | Significant risk |
| 2 | Digital Assets | The issuer earned revenue through cryptocurrency transactions and received digital assets in return. The following deficiency was identified: · The firm did not perform any procedures to establish that the issuer had control over the digital assets beyond viewing the digital asset wallets. (AS 2301.08 and .11) Financial statement audit only | AS 2301.8; AS 2301.11 | Significant risk |
| 3 | Digital Assets | The issuer earned revenue through cryptocurrency transactions and received digital assets in return. The following deficiency was identified: · The firm did not perform any procedures to evaluate the presentation of digital assets as either current or non-current assets. (AS 2301.08 and .11) Financial statement audit only | AS 2301.8; AS 2301.11 | Significant risk |
| 4 | Digital Assets | The issuer earned revenue through cryptocurrency transactions and received digital assets in return. The following deficiency was identified: · The firm did not evaluate the appropriateness of the issuer's accounting for certain of the digital assets. (AS 2301.08 and .11) Financial statement audit only | AS 2301.8; AS 2301.11 | Significant risk |
| 5 | Journal Entries | The firm identified fraud criteria for journal entries and obtained a listing of all journal entries that met the criteria. The firm did not perform sufficient substantive procedures to test those journal entries because it limited its procedures to certain journal entries without having an appropriate rationale. (AS 2401.61) Financial statement audit only | AS 2401.61 |
Issuer B5 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer's revenue included revenue recognized from contracts over time based on costs incurred to date relative to total estimated costs to complete. The following deficiency was identified: · The firm did not perform sufficient procedures to test the accuracy and completeness of an issuer-prepared schedule it used to test this revenue because it limited its procedures to comparing it to a system-generated report. Further the firm did not perform sufficient procedures to test the accuracy and completeness of the system-generated report because it limited its testing to one item. (AS 1105.10) Financial statement audit only | AS 1105.10 | |
| 2 | Revenue | The issuer's revenue included revenue recognized from contracts over time based on costs incurred to date relative to total estimated costs to complete. The following deficiency was identified: · The firm did not perform any procedures to test or identify and test controls over the accuracy and completeness of certain other issuer-prepared schedules it used to test this revenue. (AS 1105.10) Financial statement audit only | AS 1105.10 | |
| 3 | Revenue | The issuer's revenue included revenue recognized from contracts over time based on costs incurred to date relative to total estimated costs to complete. The following deficiency was identified: · The firm did not perform sufficient procedures to evaluate the reasonableness of the significant assumption related to estimated labor costs to complete because it limited its procedures to inquiry and a comparison to a report that included costs incurred subsequent to year end. Further the firm did not perform any procedures to test or identify and test controls over the accuracy and completeness of the report of costs incurred subsequent to year end. (AS 1105.10; AS 2501.16) Financial statement audit only | AS 2501.16 | |
| 4 | Inventory | The firm did not perform procedures to test the raw material costs in inventory at year end. (AS 2301.08 and .11) Financial statement audit only | AS 2301.8; AS 2301.11 | Significant risk |
| 5 | Inventory | The firm did not perform procedures to test or identify and test controls over the accuracy and completeness of certain system-generated reports that it used to substantively test certain inventory. (AS 1105.10) Financial statement audit only | AS 1105.10 | Significant risk |
Issuer C3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm did not perform procedures to evaluate whether the issuer's accounting for certain revenue as the principal rather than as an agent was appropriate beyond obtaining an issuer-prepared analysis. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 2 | Revenue | The firm did not perform sufficient procedures to test whether the issuer satisfied its performance obligations for a second type of revenue because it limited its procedures to (1) obtaining cash receipts and sales invoices and (2) sending negative confirmations to a respondent who was a related party without considering the respondent's objectivity and freedom from bias and whether the response that was received by the firm provided meaningful and appropriate evidence. (AS 2301.08 and .13; AS 2310.26 and .27) Financial statement audit only | AS 2301.8; AS 2301.13; AS 2310.26; AS 2310.27 | |
| 3 | Revenue | The firm selected a sample of transactions to test a third type of revenue. For certain of the sampled transactions the firm did not perform procedures to test the quantity used to recognize revenue beyond obtaining a system-generated report without testing or identifying and testing controls over the accuracy and completeness of the report. (AS 1105.10; AS 2301.08 and .13) Financial statement audit only | AS 1105.10; AS 2301.8; AS 2301.13 |
Issuer D2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm did not perform procedures to evaluate the relevance and reliability of certain external information used in its substantive procedures to test certain revenue. (AS 1105.04 and .06) Financial statement audit only | AS 1105.4; AS 1105.6 | |
| 2 | Revenue | In addition the firm performed a substantive analytical procedure to test this revenue. The firm developed its expectations for revenue using external data. The firm did not evaluate whether this data was sufficiently reliable for purposes of achieving its audit objective. (AS 2305.16) Financial statement audit only | AS 2305.16 |
Issuer E1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm did not perform any procedures to evaluate the relevance and reliability of certain external data it used to test certain revenue. (AS 1105.04 and .06) Financial statement audit only | AS 1105.4; AS 1105.6 |