- Inspection year
- 2024
- Report date
- 27-Feb-2025
- PCAOB release
- 104-2025-042
- Audits reviewed
- 1
- Audits w/ Part I.A deficiencies
- 1
- 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 A10 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue and Related Accounts | The firm designed a substantive procedure for testing four types of revenue as a dual-purpose test. The firm performed its substantive procedure using the sample size it determined for its control testing. This sample size was too small to provide sufficient appropriate audit evidence for the substantive procedure because the firm did not use the larger of the sample sizes that would otherwise have been designed for the two separate purposes. (AS 2315.44) Financial statement audit only | AS 2315.44 | Significant risk |
| 2 | Revenue and Related Accounts | The firm designed a substantive procedure for testing four types of revenue as a dual-purpose test. The firm performed its substantive procedure using the sample size it determined for its control testing. For the selected revenue transactions the firm did not perform procedures to test whether the issuer satisfied its performance obligations prior to the recognition of revenue beyond obtaining certain issuer-produced reports and testing the timing of cash receipts. (AS 2301.08 and .11) Financial statement audit only | AS 2301.8; AS 2301.11 | Significant risk |
| 3 | Revenue and Related Accounts | The firm's substantive procedures to test three of these types of revenue included analytical procedures. The following deficiencies were identified: · The firm did not determine whether the expectations for the three types of revenue used in these analytical procedures were based on predictable relationships. (AS 2305.13 and .14) Financial statement audit only | AS 2305.13; AS 2305.14 | Significant risk |
| 4 | Revenue and Related Accounts | The firm's substantive procedures to test three of these types of revenue included analytical procedures. The following deficiencies were identified: · The threshold that the firm established to investigate differences for two types of revenue was too high to identify misstatements that could be material either individually or in the aggregate. (AS 2305.20) Financial statement audit only | AS 2305.20 | Significant risk |
| 5 | Revenue and Related Accounts | The firm's substantive procedures to test three of these types of revenue included analytical procedures. The following deficiencies were identified: · The firm identified a difference in excess of the firm's established threshold for the third type of revenue but did not evaluate this difference beyond inquiry of management. (AS 2305.21) Financial statement audit only | AS 2305.21 | Significant risk |
| 6 | Revenue and Related Accounts | The firm's substantive procedures to test three of these types of revenue included analytical procedures. The following deficiencies were identified: · The firm used issuer-produced information to develop its expectation of one of these types of revenue but did not test or in the alternative test any controls over the accuracy of this information. (AS 2305.16) Financial statement audit only | AS 2305.16 | Significant risk |
| 7 | Revenue and Related Accounts | The firm did not perform any substantive procedures to test a fifth type of revenue. (AS 2301.08 and .11) Financial statement audit only | AS 2301.8; AS 2301.11 | Significant risk |
| 8 | Revenue and Related Accounts | The firm did not perform substantive procedures to test the deferred revenue at year end. (AS 2301.08) Financial statement audit only | AS 2301.8 | Significant risk |
| 9 | Income Taxes | The firm did not perform procedures to test certain permanent and temporary differences used in calculating the income tax provision beyond vouching these amounts to issuer-prepared schedules. (AS 2301.08 and.11) Financial statement audit only | AS 2301.8; AS 2301.11 | Significant risk |
| 10 | Journal Entries | The firm identified fraud criteria for purposes of identifying and selecting journal entries for testing. The firm did not perform procedures to determine whether any journal entries met one of its fraud criteria. In addition the firm obtained a listing of journal entries that met certain of the criteria. The firm did not perform sufficient procedures to test the journal entries in this listing because it limited its procedures to certain entries without having an appropriate rationale for limiting its testing to those journal entries. (AS 2401.61) Financial statement audit only | AS 2401.61 |