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MSPC, Certified Public Accountants and Advisors, A Professional Corporation
United States · Triennially Inspected
- Inspection year
- 2024
- Report date
- 21-Nov-2024
- PCAOB release
- 104-2025-009
- Audits reviewed
- 2
- Audits w/ Part I.A deficiencies
- 2
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 21
- Part I.B deficiencies
- 11
- Report
- View PDF ↗
Deficiencies (21)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A10 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. The firm did not perform any procedures to evaluate whether the issuer's recognition of certain revenue was in conformity 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 firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. With respect to certain revenue recognized over time the firm did not evaluate whether there were significant judgments used by the issuer in determining the timing of satisfaction of performance obligations and whether all applicable required disclosures were made. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 3 | Revenue | The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. The firm sent positive confirmation requests to a sample of customers as part of its testing of revenue. The following deficiency was identified: · The firm did not perform procedures to determine whether certain of the confirmation requests were directed to third parties who were knowledgeable about the information to be confirmed. (AS 2310.26) Financial statement audit only | AS 2310.26 | |
| 4 | Revenue | The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. The firm sent positive confirmation requests to a sample of customers as part of its testing of revenue. The following deficiency was identified: · The firm received an electronic response to one confirmation request. The firm did not consider performing procedures to address the risks associated with an electronic response such as verifying the source and contents of the confirmation response. (AS 2310.29) Financial statement audit only | AS 2310.29 | |
| 5 | Accounts Receivable | The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. The issuer recorded an allowance for expected credit losses related to accounts receivable which was based in part on significant assumptions regarding default rates. The issuer assigned credit rating categories to each receivable based on whether or not the customer had made payments and assigned a default rate to each customer's receivable based on that assigned category which was based on information from an external source. The firm's approach to test the allowance for expected credit losses 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 assumption used by the issuer related to default rates beyond comparing the rates to data from the external source that the issuer used to develop the rates. (AS 2501.16) Financial statement audit only | AS 2501.16 | Significant risk |
| 6 | Accounts Receivable | The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. The issuer recorded an allowance for expected credit losses related to accounts receivable which was based in part on significant assumptions regarding default rates. The issuer assigned credit rating categories to each receivable based on whether or not the customer had made payments and assigned a default rate to each customer's receivable based on that assigned category which was based on information from an external source. The firm's approach to test the allowance for expected credit losses was to test the issuer's process. The following deficiency was identified: · The firm did not perform procedures to evaluate the relevance of the credit rating categories from the external source that the issuer used in determining the default rates. (AS 1105.04 and .06) Financial statement audit only | AS 1105.4; AS 1105.6 | Significant risk |
| 7 | Accounts Receivable | The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. The issuer recorded an allowance for expected credit losses related to accounts receivable which was based in part on significant assumptions regarding default rates. The issuer assigned credit rating categories to each receivable based on whether or not the customer had made payments and assigned a default rate to each customer's receivable based on that assigned category which was based on information from an external source. The firm's approach to test the allowance for expected credit losses was to test the issuer's process. The following deficiency was identified: · The firm did not perform procedures to test or test any controls over the accuracy of certain information used by the issuer in calculating a component of its allowance for expected credit losses. (AS 1105.10) Financial statement audit only | AS 1105.10 | Significant risk |
| 8 | Accounts Receivable | The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. The issuer recorded an allowance for expected credit losses related to accounts receivable which was based in part on significant assumptions regarding default rates. The issuer assigned credit rating categories to each receivable based on whether or not the customer had made payments and assigned a default rate to each customer's receivable based on that assigned category which was based on information from an external source. The firm's approach to test the allowance for expected credit losses was to test the issuer's process. The following deficiency was identified: · The firm did not perform procedures beyond comparison to an issuer-prepared schedule to test the issuer's presentation of certain items related to accounts receivable and the allowance for expected credit losses in the statement of cash flows. (AS 2301.08) Financial statement audit only | AS 2301.8 | Significant risk |
| 9 | Intangible Assets | The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. The issuer reported intangible assets 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. The firm did not sufficiently evaluate whether the method used by the issuer to develop the impairment analyses was in conformity with GAAP as it did not evaluate whether the method was in conformity with certain applicable requirements of FASB ASC Topic 350 Intangibles—Goodwill and Other and FASB ASC Topic 360 Property Plant and Equipment. (AS 2501.10) Financial statement audit only | AS 2501.10 | Significant risk |
| 10 | Intangible Assets | The firm's internal inspection program had inspected this audit and reviewed these areas but did not identify the deficiencies below. The issuer reported intangible assets 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. The firm did not perform procedures beyond inquiry to evaluate the reasonableness of significant assumptions related to the undiscounted cash flow projections used by the issuer to develop the impairment analyses. (AS 2501.16) Financial statement audit only | AS 2501.16 | Significant risk |
Issuer B11 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm selected for testing a control that consisted of management's review of a reconciliation related to revenue. The firm did not (1) evaluate the specific review procedures that the control owner 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 | Revenue | The firm selected for testing a control that consisted of management's review of a reconciliation related to revenue. The firm did not identify and test any controls over the accuracy and completeness of the data used in the operation of the control. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 3 | Revenue | The firm selected for testing a control over sales invoices. The firm did not perform procedures to test or identify and test controls over the completeness of the issuer-produced sales invoice listing used in its testing of the control. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 4 | Long-Lived Assets | The firm selected for testing a review control over purchases and disposals of long-lived assets. The firm did not test the aspect of this control related to the control owner's review of the summary of activity or transaction details supporting the control. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | Significant risk |
| 5 | Long-Lived Assets | The issuer developed undiscounted cash flows to evaluate certain long-lived assets for potential impairment. The following deficiency was identified: · The firm did not perform procedures to evaluate the reasonableness of significant assumptions related to daily revenue rates beyond comparing the rates used by the issuer to rates obtained from the external source that the issuer used to develop the assumptions. (AS 2501.16) Both financial statement and ICFR audits | AS 2501.16 | Significant risk |
| 6 | Long-Lived Assets | The issuer developed undiscounted cash flows to evaluate certain long-lived assets for potential impairment. The following deficiency was identified: · The firm did not perform procedures to evaluate the relevance and reliability of the rates obtained from the external source. (AS 1105.04 and .06) Both financial statement and ICFR audits | AS 1105.4; AS 1105.6 | Significant risk |
| 7 | Long-Lived Assets | The issuer developed undiscounted cash flows to evaluate certain long-lived assets for potential impairment. The following deficiency was identified: · The firm did not perform sufficient procedures to evaluate the reasonableness of significant assumptions related to certain expense rates because it limited its procedures to comparing the rates to the actual operating expenses during the year and the issuer's budget without evaluating whether the issuer had a reasonable basis for the assumptions in the budget. (AS 2501.16) Both financial statement and ICFR audits | AS 2501.16 | Significant risk |
| 8 | Evaluating Control Deficiencies | The firm identified control deficiencies related to significant accounts and in areas of significant risk. The firm did not provide a reasonable basis to support its conclusion that the magnitude of the potential misstatements resulting from the control deficiencies was not material. (AS 2201.62) Both financial statement and ICFR audits | AS 2201.62 | |
| 9 | Evaluating Control Deficiencies | The firm identified deficiencies in the design and operating effectiveness of controls related to revenue and long-lived assets. The firm identified and tested two review controls that it believed would mitigate the deficiencies ('compensating controls'). The following deficiency was identified: · For one control the firm did not perform procedures to evaluate the review procedures that the control owner performed to be able to conclude that the compensating control mitigated the identified control deficiency. (AS 2201.68) Both financial statement and ICFR audits | AS 2201.68 | |
| 10 | Evaluating Control Deficiencies | The firm identified deficiencies in the design and operating effectiveness of controls related to revenue and long-lived assets. The firm identified and tested two review controls that it believed would mitigate the deficiencies ('compensating controls'). The following deficiency was identified: · The firm did not identity and test any controls over the accuracy and completeness of the supporting documentation used in the performance of this control. (AS 2201.68) Both financial statement and ICFR audits | AS 2201.68 | |
| 11 | Evaluating Control Deficiencies | The firm identified deficiencies in the design and operating effectiveness of controls related to revenue and long-lived assets. The firm identified and tested two review controls that it believed would mitigate the deficiencies ('compensating controls'). The following deficiency was identified: · For another control the firm did not identify that this control did not address the identified control deficiencies related to revenues and long-lived assets. (AS 2201.68) Both financial statement and ICFR audits | AS 2201.68 |