- Inspection year
- 2024
- Report date
- 25-May-2025
- PCAOB release
- 104-2025-100
- Audits reviewed
- 17
- Audits w/ Part I.A deficiencies
- 7
- Part I.A deficiency rate
- 41%
- Part I.A deficiencies
- 16
- Part I.B deficiencies
- 5
- 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 A2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer recognized revenue based on the rates in the contracts with its customers and the amount of time incurred to provide its services that was maintained in one of the issuer's information-technology (IT) systems. The firm did not perform sufficient procedures to test the accuracy and completeness of the time data because its procedures were limited to comparing the issuer's data to data from an external source and inspecting the issuer's reconciliation of the data to data the issuer obtained from its customers without evaluating the reliability of the data from these external sources. (AS 1105.04 .06 and .10) Financial statement audit only | AS 1105.4; AS 1105.6; AS 1105.10 | |
| 2 | Going Concern | The issuer used forecasted cash flows in its evaluation of its ability to continue as a going concern and concluded that the substantial doubt was alleviated by its plans. The issuer also used forecasted cash flows in its evaluation of certain long-lived assets for possible impairment. The issuer developed both of these forecasted cash flows using various assumptions including certain employee data. The firm used certain labor hour information in its substantive testing of the employee data for each of these forecasted cash flows but did not perform any procedures to test the accuracy and completeness of this information. (AS 1105.10; AS 2415.03) Financial statement audit only | AS 1105.10; AS 2415.3 |
Issuer B4 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Significant Estimates | For certain assets that were evaluated for impairment the issuer determined adjustment factors that were important inputs used in developing this estimate. The following deficiencies were identified: · The firm selected for testing controls that consisted of the issuer's review of this estimate including an assessment of these inputs for reasonableness. The firm did not evaluate the specific review procedures that the control owner performed to assess the reasonableness of these inputs. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 2 | Significant Estimates | For certain assets that were evaluated for impairment the issuer determined adjustment factors that were important inputs used in developing this estimate. The following deficiencies were identified: · The firm's approach for substantively testing the reasonableness of this estimate was to test the issuer's process. The firm did not perform any procedures to evaluate the reasonableness of the significant assumptions the issuer used to develop this estimate. (AS 2501.16) Both financial statement and ICFR audits | AS 2501.16 | |
| 3 | Significant Estimates | For certain assets that were evaluated for impairment the issuer determined adjustment factors that were important inputs used in developing this estimate. The following deficiencies were identified: · The firm's approach for substantively testing the reasonableness of this estimate was to test the issuer's process. The firm did not perform any procedures to evaluate the relevance of certain data that the issuer used to develop the adjustment factors. (AS 1105.04 and .06) Both financial statement and ICFR audits | AS 1105.4; AS 1105.6 | |
| 4 | Loans | During the year the issuer purchased certain collateralized loans at a discount and engaged specialists to estimate the fair value of these loans' underlying collateral that the issuer used to determine whether these discounts were acceptable. The firm's approach for substantively testing the fair value of the underlying collateral was to test the issuer's process. The firm did not perform procedures to evaluate the reasonableness of the significant assumptions the company's specialists used to develop the collateral values beyond inquiring of management and reading information prepared by the company's specialists. Further the firm did not perform procedures with respect to its use of the work of the company's specialists as audit evidence beyond gaining an understanding of the professional qualifications for one of the company's specialists. (AS 1105.A1-.A10; AS 2501.16) Both financial statement and ICFR audits | 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 2501.16 | Significant risk |
Issuer C4 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm's substantive procedures to test certain revenue included two substantive analytical procedures. The following deficiencies were identified: · For both substantive analytical procedures the firm used certain information obtained from an external source to develop its expectations but did not evaluate the reliability of this information. (AS 2305.16) Financial statement audit only | AS 2305.16 | |
| 2 | Revenue | The firm's substantive procedures to test certain revenue included two substantive analytical procedures. The following deficiencies were identified: · For one of these substantive analytical procedures the firm developed its expectation based on certain information obtained from another external source but did not evaluate whether this information was sufficiently reliable for purposes of achieving its audit objectives. (AS 2305.16) Financial statement audit only | AS 2305.16 | |
| 3 | Long-Lived Assets | For all but one of the issuer's asset groups the firm did not perform any procedures to evaluate certain indicators of potential impairment that existed at year end. (AS 2301.08 and .11; AS 2810.03) Financial statement audit only | AS 2301.8; AS 2301.11; AS 2810.3 | Significant risk |
| 4 | Long-Lived Assets | For the remaining asset group the issuer identified events during the year indicating that the carrying value of its long-lived assets for that asset group may not be recoverable and performed an impairment analysis. The firm used an issuer-prepared schedule in its evaluation of the issuer's assessment of those long-lived assets for possible impairment but did not perform any procedures to test the accuracy of certain information in this schedule. (AS 1105.10) Financial statement audit only | AS 1105.10 | Significant risk |
Issuer D3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer recognized revenue from certain contracts over time based on estimated costs incurred relative to total estimated costs to complete the contract. The firm did not evaluate the reasonableness of the significant standard cost assumption that the issuer used to develop the estimated costs incurred on and the estimated costs to complete the contracts the firm selected for testing. (AS 2501.16) Financial statement audit only | AS 2501.16 | |
| 2 | Inventory | At two of the issuer's locations the issuer valued certain inventory at standard cost and capitalized certain labor and overhead costs to inventory based on the difference between the actual costs incurred and the costs recorded at standard. The firm did not perform sufficient substantive procedures to test the capitalized variance recorded by the issuer at year end because it did not evaluate whether the amount the issuer used to calculate the capitalized variance represented the actual difference between actual and standard costs. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 3 | Inventory | At one of these locations the issuer valued certain inventory using the last-in first-out (LIFO) method. The firm used certain information provided by the issuer to test the LIFO reserve but did not perform any procedures to test or test any controls over the accuracy of this information. (AS 1105.10) Financial statement audit only | AS 1105.10 |
Issuer E1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm identified a control deficiency related to the issuer's control over the occurrence and cut-off of certain revenue. The firm identified and tested various controls that it believed would mitigate this deficiency but did not identify that these compensating controls either did not address the risk of material misstatement related to whether revenue occurred and was recorded in the appropriate period or did not operate at a level of precision that would prevent or detect a misstatement that could be material. (AS 2201.68) ICFR audit only | AS 2201.68 |
Issuer F1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer recognized revenue from certain contracts over time based on costs incurred to date relative to total estimated costs to complete the contract. The firm did not sufficiently test the estimated total costs to complete a certain contract it selected for testing because it did not perform any substantive procedures to evaluate the reasonableness of the remaining number of units the issuer expected to deliver that the issuer used to develop the estimated total costs to complete. (AS 2501.16) Financial statement audit only | AS 2501.16 |
Issuer G1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Inventory | The issuer recorded an excess and obsolete (E&O) inventory reserve for certain inventory based on the inventory on hand compared to the sales forecast for this inventory. The firm did not perform any procedures to evaluate the reasonableness of the sales forecast that the issuer used to develop this E&O inventory reserve. (AS 2501.16) Financial statement audit only | AS 2501.16 |