- Inspection year
- 2023
- Report date
- 21-Nov-2024
- PCAOB release
- 104-2025-001
- Audits reviewed
- 4
- Audits w/ Part I.A deficiencies
- 4
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 25
- Part I.B deficiencies
- 11
- Report
- View PDF ↗
Deficiencies (25)
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 | Inventory | The firm selected for testing certain controls over the reconciliation and/or review of various accounts including certain accounts related to revenue and inventory. 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 firm did not identify and test any controls over (1) the accuracy and completeness of issuer-produced information used in the operation of the above controls and (2) the relevance and reliability of certain external information related to inventory used in the operation of one of the above controls. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 3 | Inventory | The issuer recorded an inventory reserve and the firm's approach for substantively testing the inventory reserve was to test the issuer's process. The following deficiency was identified: · The firm did not perform procedures to test or (as discussed above) identify and test controls over the accuracy and completeness of certain issuer-produced information used by the issuer to develop the inventory reserve. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 4 | Inventory | The issuer recorded an inventory reserve and the firm's approach for substantively testing the inventory reserve was to test the issuer's process. The following deficiency was identified: · The firm did not perform procedures to evaluate or (as discussed above) identify and test controls over the relevance and reliability of certain external information that the issuer used to develop the inventory reserve. (AS 1105.04 and.06) Both financial statement and ICFR audits | AS 1105.4; AS 1105.6 | |
| 5 | Inventory | The issuer recorded an inventory reserve and the firm's approach for substantively testing the inventory reserve was to test the issuer's process. The following deficiency was identified: · The firm did not perform procedures to evaluate the reasonableness of the significant assumptions. (AS 2501.16) Both financial statement and ICFR audits | AS 2501.16 |
Issuer B13 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm did not perform sufficient substantive procedures to evaluate whether certain revenue was recognized in conformity with IFRS 15 Revenue from Contracts with Customers because it did not evaluate beyond reading the issuer's revenue recognition policy (1) each party's rights regarding the goods or services to be transferred and (2) the payment terms for the goods or services to be transferred. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 2 | Revenue | To evaluate the reliability of certain external information the firm used to test revenue the firm sent a positive confirmation request to the external party and received an electronic response. The firm did not consider performing procedures to address the risks associated with the electronic response such as verifying the source and contents of the confirmation response. (AS 2310.29) Financial statement audit only | AS 2310.29 | |
| 3 | Revenue | The firm did not perform any procedures to evaluate the reliability of certain external information it used to test revenue. (AS 1105.04 and .06) Financial statement audit only | AS 1105.4; AS 1105.6 | |
| 4 | Revenue | The firm's substantive procedures to test this revenue included performing a substantive analytical procedure. The firm used external data in developing its expectation but did not perform any procedures to evaluate the reliability of that data. (AS 2305.16) Financial statement audit only | AS 2305.16 | |
| 5 | Revenue | The sample size the firm used in one of its substantive procedures to test revenue was too small to provide sufficient appropriate audit evidence because this procedure was designed based on a level of reliance on evidence from other substantive procedures that was not supported due to the deficiency in the firm's substantive analytical procedure discussed above. (AS 2315.19 .23 and .23A) Financial statement audit only | AS 2315.19; AS 2315.23; AS 2315.23A | |
| 6 | Long-Lived Assets | The issuer performed a quantitative assessment of impairment of certain long-lived assets and engaged an external specialist to provide information it used to develop an assumption. The firm's approach for substantively testing the impairment of long-lived assets was to test the issuer's process and the firm used an auditor-employed specialist to evaluate the methodology used by the issuer and a significant assumption the issuer developed. The following deficiency was identified: · The firm did not perform sufficient procedures to evaluate the reasonableness of a significant assumption developed by the issuer because it did not evaluate the significant difference between it and a significant assumption used by the issuer in another estimate tested. (AS 2501.16) Financial statement audit only | AS 2501.16 | Significant risk |
| 7 | Long-Lived Assets | The issuer performed a quantitative assessment of impairment of certain long-lived assets and engaged an external specialist to provide information it used to develop an assumption. The firm's approach for substantively testing the impairment of long-lived assets was to test the issuer's process and the firm used an auditor-employed specialist to evaluate the methodology used by the issuer and a significant assumption the issuer developed. The following deficiency was identified: · The firm did not perform procedures beyond inquiry to evaluate the reasonableness of certain other significant assumptions developed by the issuer. (AS 2501.16) Financial statement audit only | AS 2501.16 | Significant risk |
| 8 | Long-Lived Assets | The issuer performed a quantitative assessment of impairment of certain long-lived assets and engaged an external specialist to provide information it used to develop an assumption. The firm's approach for substantively testing the impairment of long-lived assets was to test the issuer's process and the firm used an auditor-employed specialist to evaluate the methodology used by the issuer and a significant assumption the issuer developed. The following deficiency was identified: · The firm did not perform procedures to evaluate whether the issuer had a reasonable basis for another significant assumption it developed. (AS 2501.16) Financial statement audit only | AS 2501.16 | Significant risk |
| 9 | Long-Lived Assets | The issuer performed a quantitative assessment of impairment of certain long-lived assets and engaged an external specialist to provide information it used to develop an assumption. The firm's approach for substantively testing the impairment of long-lived assets was to test the issuer's process and the firm used an auditor-employed specialist to evaluate the methodology used by the issuer and a significant assumption the issuer developed. The following deficiency was identified: · The firm did not sufficiently evaluate the reasonableness of another significant assumption because it did not identify that the auditor-employed specialist did not (1) evaluate the relevance of certain internal and external information it used to evaluate the reasonableness of the assumption and (2) evaluate significant differences between the assumption and both external information it obtained and information provided by the company's specialist. Further the firm did not perform procedures to use the work of the company's specialist as audit evidence. (AS 1105.04 .06 and .A1-.A10; AS 1201.C6 and .C7; AS 2501.16) Financial statement audit only | AS 1105.4; AS 1105.6; AS 1105.A1; AS 1105.A10; AS 1105.A2; AS 1105.A3; AS 1105.A4; AS 1105.A5; AS 1105.A6; AS 1105.A7; AS 1105.A8; AS 1105.A9; AS 1201.C6; AS 1201.C7; AS 2501.16 | Significant risk |
| 10 | Long-Lived Assets | The issuer performed a quantitative assessment of impairment of certain long-lived assets and engaged an external specialist to provide information it used to develop an assumption. The firm's approach for substantively testing the impairment of long-lived assets was to test the issuer's process and the firm used an auditor-employed specialist to evaluate the methodology used by the issuer and a significant assumption the issuer developed. The following deficiency was identified: · The firm did not sufficiently evaluate whether the method used by the issuer to perform its quantitative assessment was in conformity with International Accounting Standard (IAS) 36 Impairment of Assets because it did not identify that the auditor-employed specialist did not evaluate the effect on the quantitative assessment resulting from departures from IAS 36 it identified in the issuer's method. (AS 1201.C6 and .C7; AS 2501.10) Financial statement audit only | AS 1201.C6; AS 1201.C7; AS 2501.10 | Significant risk |
| 11 | Long-Lived Assets | The issuer performed a quantitative assessment of impairment of certain long-lived assets and engaged an external specialist to provide information it used to develop an assumption. The firm's approach for substantively testing the impairment of long-lived assets was to test the issuer's process and the firm used an auditor-employed specialist to evaluate the methodology used by the issuer and a significant assumption the issuer developed. The following deficiency was identified: · The firm did not evaluate the relevance and/or reliability of certain external information it used to test the quantitative assessment. (AS 1105.04 and .06) Financial statement audit only | AS 1105.4; AS 1105.6 | Significant risk |
| 12 | Long-Lived Assets | The issuer performed a quantitative assessment of impairment of certain long-lived assets and engaged an external specialist to provide information it used to develop an assumption. The firm's approach for substantively testing the impairment of long-lived assets was to test the issuer's process and the firm used an auditor-employed specialist to evaluate the methodology used by the issuer and a significant assumption the issuer developed. The following deficiency was identified: · The firm did not perform procedures to test or test any controls over the accuracy and completeness of issuer-produced data used by the issuer to develop a significant assumption used in its quantitative assessment. (AS 1105.10) Financial statement audit only | AS 1105.10 | Significant risk |
| 13 | Long-Lived Assets | The firm did not evaluate the appropriateness of the presentation of certain long-lived assets. (AS 2301.08) Financial statement audit only | AS 2301.8 | Significant risk |
Issuer C4 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer recognized multiple types of revenue. The following deficiency was identified: · For one type of revenue the firm did not perform procedures to evaluate whether the underlying contracts represented contracts with an identifiable customer in accordance with FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 2 | Revenue | The issuer recognized multiple types of revenue. The following deficiency was identified: · The firm did not perform substantive procedures to evaluate the relevance and/or reliability of certain external information it used to test two types of revenue. (AS 1105.04 and.06) Financial statement audit only | AS 1105.4; AS 1105.6 | |
| 3 | Revenue | The issuer recognized multiple types of revenue. The following deficiency was identified: · The firm's substantive procedures to test one type of revenue included performing substantive analytical procedures. The firm used external data in developing its expectation but did not perform any procedures to evaluate the reliability of that data. (AS 2305.16) Financial statement audit only | AS 2305.16 | |
| 4 | Revenue | The issuer recognized multiple types of revenue. The following deficiency was identified: · The firm did not perform procedures to test or test any controls over the accuracy and completeness of certain issuer-produced information it used to test two types of revenue. (AS 1105.10) Financial statement audit only | AS 1105.10 |
Issuer D3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Investment Securities | The issuer reported the valuation of certain investments based on investee financial results including unaudited financial statements. The firm did not apply or request that the investor arrange with the investee to have another auditor apply appropriate auditing procedures to the unaudited financial statements for these investees. (AS 1105.63) Financial statement audit only | AS 1105.63 | Significant risk |
| 2 | Significant Accounts | The issuer engaged a specialist to develop an estimate of a significant account. The firm selected a sample to test the accuracy and completeness of certain data used by the company's specialist. The firm did not sufficiently test the accuracy and completeness of this data because it selected its sample from a sub-population of the data. (AS 1105.A8a) Financial statement audit only | AS 1105.A8a | Significant risk |
| 3 | Significant Accounts | The issuer engaged a specialist to develop an estimate of a significant account. The firm selected a sample to test the accuracy and completeness of certain data used by the company's specialist. The firm did not test the accuracy of certain other data that the company's specialist used to develop a significant assumption. (AS 1105.A8a) Financial statement audit only | AS 1105.A8a | Significant risk |