- Inspection year
- 2024
- Report date
- 27-Mar-2025
- PCAOB release
- 104-2025-062
- Audits reviewed
- 3
- Audits w/ Part I.A deficiencies
- 3
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 14
- Part I.B deficiencies
- 3
- Report
- View PDF ↗
Deficiencies (14)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A8 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Intangible Assets | The firm's approach for substantively testing the issuer's impairment analysis for certain intangible assets was to develop an independent expectation which included significant assumptions that were developed by the issuer and the firm. The following deficiencies were identified: · The firm did not perform sufficient procedures to evaluate the reasonableness of a certain significant assumption that was developed by the issuer because the firm did not (1) evaluate whether the issuer had a reasonable basis for this assumption and (2) take into account the issuer's intent and ability to carry out this assumption beyond performing inquiries of management and inspecting invoices. (AS 2501.16 and .17) Financial statement audit only | AS 2501.16; AS 2501.17 | Significant risk |
| 2 | Intangible Assets | The firm's approach for substantively testing the issuer's impairment analysis for certain intangible assets was to develop an independent expectation which included significant assumptions that were developed by the issuer and the firm. The following deficiencies were identified: · The firm did not perform any procedures to demonstrate that it had a reasonable basis for a certain significant assumption that was developed by the firm including taking into account the requirements of certain elements of the applicable financial framework. (AS 2501.21 and .22) Financial statement audit only | AS 2501.21; AS 2501.22 | Significant risk |
| 3 | Inventory | The issuer used an information technology (IT) application to process inventory transactions and calculate inventory costs. To reduce the extent of its substantive procedures over the valuation of inventory the firm tested and placed reliance on certain application controls. The following deficiencies were identified: · The firm selected for testing a logical access control over this IT application. The firm did not perform procedures to test the design and operating effectiveness of this control beyond observing the control owner perform a point in time logical access review. (AS 2301.16) Financial statement audit only | AS 2301.16 | |
| 4 | Inventory | The issuer used an information technology (IT) application to process inventory transactions and calculate inventory costs. To reduce the extent of its substantive procedures over the valuation of inventory the firm tested and placed reliance on certain application controls. The following deficiencies were identified: · The firm selected for testing a logical access control over this IT application. The firm identified a control deficiency in its testing of this control but did not evaluate the severity of this deficiency and its effect on its control risk assessment. (AS 2301.34) Financial statement audit only | AS 2301.34 | |
| 5 | Inventory | The issuer used an information technology (IT) application to process inventory transactions and calculate inventory costs. To reduce the extent of its substantive procedures over the valuation of inventory the firm tested and placed reliance on certain application controls. The following deficiencies were identified: · The firm did not identify and test any controls related to program changes for this IT system. (AS 2301.16) Financial statement audit only | AS 2301.16 | |
| 6 | Inventory | The firm did not perform sufficient substantive procedures to test the valuation of inventory as follows: · The sample size the firm used in certain of its substantive procedures to test the valuation of inventory was too small to provide sufficient appropriate audit evidence because these procedures were designed based on a level of control reliance that was not supported due to the deficiencies in the firm's control testing discussed above. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A) Financial statement audit only | AS 2301.16; AS 2301.18; AS 2301.37; AS 2315.19; AS 2315.23; AS 2315.23A | |
| 7 | Inventory | The firm did not perform sufficient substantive procedures to test the valuation of inventory as follows: · The firm did not perform any procedures to test or sufficiently test controls over the accuracy and completeness of certain system-generated data that it used to substantively test the valuation of inventory. (AS 1105.10) Financial statement audit only | AS 1105.10 | |
| 8 | 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 procedures to test those journal entries because other than inquiries of management it limited its procedures to one journal entry without having an appropriate rationale for limiting its testing to that journal entry. (AS 2401.61) Financial statement audit only | AS 2401.61 |
Issuer B2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Inventory | The firm did not perform any procedures to test certain significant assumptions used by the issuer to determine the cost of certain inventory. (AS 2501.16) Financial statement audit only | AS 2501.16 | Significant risk |
| 2 | 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 any procedures to test these journal entries. (AS 2401.61) Financial statement audit only | AS 2401.61 |
Issuer C4 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Long-Lived Assets | The issuer engaged a specialist to develop significant inputs used to determine the fair value of certain long-lived assets. The following deficiencies were identified: · The firm did not test the accuracy and completeness of certain company-produced data used by the company's specialist. (AS 1105.A8a) Financial statement audit only | AS 1105.A8a | Significant risk |
| 2 | Long-Lived Assets | The issuer engaged a specialist to develop significant inputs used to determine the fair value of certain long-lived assets. The following deficiencies were identified: · The firm did not evaluate the relevance and reliability of certain data from external sources used by the company's specialist. (AS 1105.A8a) Financial statement audit only | AS 1105.A8a | Significant risk |
| 3 | Long-Lived Assets | The issuer engaged a specialist to develop significant inputs used to determine the fair value of certain long-lived assets. The following deficiencies were identified: · The firm did not perform any procedures to evaluate the reasonableness of certain significant assumptions developed by the company's specialist and the issuer. (AS 1105.A8b; AS 2501.16) Financial statement audit only | AS 1105.A8b; AS 2501.16 | Significant risk |
| 4 | Long-Lived Assets | The issuer engaged a specialist to develop significant inputs used to determine the fair value of certain long-lived assets. The following deficiencies were identified: · The firm did not evaluate whether the methods used by the company's specialist were appropriate under the circumstances taking into account the requirements of IFRS. (AS 1105.A8c) Financial statement audit only | AS 1105.A8c | Significant risk |