- Inspection year
- 2024
- Report date
- 25-Jun-2025
- PCAOB release
- 104-2025-104
- Audits reviewed
- 26
- Audits w/ Part I.A deficiencies
- 21
- Part I.A deficiency rate
- 81%
- Part I.A deficiencies
- 93
- Part I.B deficiencies
- 10
- Report
- View PDF ↗
Deficiencies (93)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A12 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Inventory | The firm performed independent test counts of inventory after year end. The following deficiencies were identified: · The firm did not compare the inventory listing it used to perform its substantive procedures to the recorded balance. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 2 | Inventory | The firm performed independent test counts of inventory after year end. The following deficiencies were identified: · The firm did not apply tests of intervening transactions in inventory between year end and the date of its test counts. (AS 2510.12) Financial statement audit only | AS 2510.12 | |
| 3 | Inventory | The firm's substantive procedures to test the unit cost of inventory consisted of (1) selecting a sample of raw materials for testing and (2) testing the issuer's process for allocating labor and overhead costs to inventory. The following deficiencies were identified: · The firm did not perform sufficient procedures to test the raw materials cost because its procedures were limited to comparing the recorded cost to supporting documentation for the most recent purchase. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 4 | Inventory | The firm's substantive procedures to test the unit cost of inventory consisted of (1) selecting a sample of raw materials for testing and (2) testing the issuer's process for allocating labor and overhead costs to inventory. The following deficiencies were identified: · The firm did not perform procedures to test or test controls over the accuracy and completeness of certain issuer-produced information that it used in its testing of the allocated labor and overhead costs. (AS 1105.10) Financial statement audit only | AS 1105.10 | |
| 5 | Inventory | The firm's substantive procedures to test the unit cost of inventory consisted of (1) selecting a sample of raw materials for testing and (2) testing the issuer's process for allocating labor and overhead costs to inventory. The following deficiencies were identified: · The firm did not perform procedures beyond inquiring of management to evaluate the reasonableness of certain significant assumptions used by the issuer to allocate overhead costs. (AS 2501.16) Financial statement audit only | AS 2501.16 | |
| 6 | Inventory | The firm's substantive procedures to test the unit cost of inventory consisted of (1) selecting a sample of raw materials for testing and (2) testing the issuer's process for allocating labor and overhead costs to inventory. The following deficiencies were identified: · The firm did not perform any procedures to evaluate whether inventory was recorded at the lower of cost or net realizable value. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 7 | Inventory | The firm did not perform any substantive procedures to test the issuer's reserve for excess and obsolete inventory. (AS 2501.07) Financial statement audit only | AS 2501.7 | |
| 8 | Revenue | The firm's substantive procedures to test revenue included selecting samples of transactions for testing. The following deficiencies were identified: · The firm did not perform procedures to test or test controls over the completeness of the populations it used to make its selections. (AS 1105.10) Financial statement audit only | AS 1105.10 | |
| 9 | Revenue | The firm's substantive procedures to test revenue included selecting samples of transactions for testing. The following deficiencies were identified: · The issuer recognized certain of this revenue upon (1) delivery and customer acceptance of products or (2) completion of its services. For certain selections the firm did not perform procedures to test whether (1) the customer had accepted the products or (2) the issuer had completed its services. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 10 | Business Combinations | During the year the issuer entered into a merger agreement which included provisions for contingent payments to the sellers upon the satisfaction of certain criteria. The following deficiencies were identified: · The firm's approach to substantively test the fair value of one of these provisions consisted of developing an independent expectation using an auditor-employed specialist. The firm did not identify that the auditor-employed specialist did not perform procedures to demonstrate it had a reasonable basis for a significant assumption it developed. (AS 1201.C6 and .C7; AS 2501.22) Financial statement audit only | AS 1201.C6; AS 1201.C7; AS 2501.22 | Significant risk |
| 11 | Business Combinations | During the year the issuer entered into a merger agreement which included provisions for contingent payments to the sellers upon the satisfaction of certain criteria. The following deficiencies were identified: · The firm did not perform any other procedures to evaluate the issuer's accounting for and presentation and disclosure of this provision. (AS 2301.08 and .11) Financial statement audit only | AS 2301.8; AS 2301.11 | Significant risk |
| 12 | Business Combinations | During the year the issuer entered into a merger agreement which included provisions for contingent payments to the sellers upon the satisfaction of certain criteria. The following deficiencies were identified: · For another provision the firm did not identify and evaluate the issuer's omission of certain disclosures required under FASB ASC Topic 718 Compensation—Stock Compensation related to the nature and terms of the provision and the potential effects of the provision on shareholders. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 | Significant risk |
Issuer B8 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer recognized revenue from certain arrangements as single performance obligations satisfied at a point in time. The firm selected a sample of these revenue transactions for testing. The following deficiencies were identified: · The firm did not perform sufficient procedures to evaluate whether the issuer recognized revenue in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers because it did not evaluate (1) the issuer's identification of the customers in these arrangements and (2) whether the issuer was acting as a principal or as an agent. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 2 | Revenue | The issuer recognized revenue from certain arrangements as single performance obligations satisfied at a point in time. The firm selected a sample of these revenue transactions for testing. The following deficiencies were identified: · The firm did not perform procedures to test whether the performance obligations had been satisfied before revenue was recognized beyond comparing the transactions selected for testing to an issuer-produced report. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 3 | Revenue | The firm did not sufficiently evaluate whether the issuer's accounting for certain other transactions as revenue was appropriate because it did not evaluate whether one or more of the scope exceptions under FASB ASC Topic 606 were applicable. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 4 | Goodwill | The issuer engaged a specialist to perform an assessment of its goodwill for possible impairment. The firm's approach to substantively test the issuer's goodwill impairment assessment consisted of developing an independent expectation of the fair value of the issuer's single reporting unit as a range using an auditor-employed specialist. The following deficiencies were identified: · The firm did not evaluate whether the auditor-employed specialist's independent expectation of the fair value as a range encompassed only reasonable outcomes and was supported by sufficient appropriate audit evidence. (AS 1201.C6 and .C7; AS 2501.25) Financial statement audit only | AS 1201.C6; AS 1201.C7; AS 2501.25 | Significant risk |
| 5 | Goodwill | The issuer engaged a specialist to perform an assessment of its goodwill for possible impairment. The firm's approach to substantively test the issuer's goodwill impairment assessment consisted of developing an independent expectation of the fair value of the issuer's single reporting unit as a range using an auditor-employed specialist. The following deficiencies were identified: · The firm did not identify that the auditor-employed specialist did not perform procedures to evaluate the relevance of data from external sources it used to develop the independent expectation as a range. (AS 1105.04 and .06; AS 1201.C6 and .C7) Financial statement audit only | AS 1105.4; AS 1105.6; AS 1201.C6; AS 1201.C7 | Significant risk |
| 6 | Intangible Assets | The issuer engaged a specialist to perform an assessment of an intangible asset for possible impairment. The firm's approach to substantively test this assessment was to test the issuer's process with the assistance of an auditor-employed specialist. The firm did not identify that the auditor-employed specialist did not perform procedures to evaluate the reasonableness of a significant assumption developed by the company's specialist. (AS 1105.A8b; AS 1201.C6 and .C7) Financial statement audit only | AS 1105.A8b; AS 1201.C6; AS 1201.C7 | Significant risk |
| 7 | Income Taxes | The issuer recorded a partial valuation allowance against its recorded deferred tax assets based on forecasted taxable income which included significant assumptions developed by the issuer that were also used in the issuer's intangible asset impairment assessment discussed above. The firm did not sufficiently evaluate the reasonableness of these significant assumptions including taking into account the issuer's intent and ability to carry out these assumptions because its procedures were limited to inquiring of management and comparing these assumptions to historical financial information and written plans. Further the firm did not evaluate certain significant differences between the issuer's historical experience and these assumptions. (AS 2501.16 and .17) Financial statement audit only | AS 2501.16; AS 2501.17 | |
| 8 | Income Taxes | The firm did not perform procedures to test the issuer's income tax provision and deferred tax accounts because its procedures were limited to inquiring of management and comparing forecasted taxable income to historical financial information and written plans. (AS 2301.08) Financial statement audit only | AS 2301.8 |
Issuer C8 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer recorded certain revenue based on transactions that occurred on applications maintained by external parties. The following deficiencies were identified: · For two types of revenue the firm did not perform substantive procedures to evaluate whether the performance obligations had been satisfied before revenue was recognized. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 2 | Revenue | The issuer recorded certain revenue based on transactions that occurred on applications maintained by external parties. The following deficiencies were identified: · To test a third type of revenue the firm sent positive confirmation requests to the external parties that maintained the applications. The firm's confirmation procedures were not sufficient because the firm did not consider whether the external parties would have the information necessary to confirm that the issuer's performance obligations had been satisfied. (AS 2310.26) Financial statement audit only | AS 2310.26 | |
| 3 | Revenue | The issuer recorded certain revenue based on transactions that occurred on applications maintained by external parties. The following deficiencies were identified: · To test a third type of revenue the firm sent positive confirmation requests to the external parties that maintained the applications. For the items for which the requested confirmations were not returned the firm did not perform alternative procedures that provided sufficient appropriate audit evidence that the recorded amounts of revenue were accurate as of the confirmation date. (AS 2310.31) Financial statement audit only | AS 2310.31 | |
| 4 | Goodwill | The issuer engaged a specialist to perform assessments of goodwill and intangible assets for possible impairment using various significant assumptions including assumptions related to forecasted cash flows. The firm's approach to evaluate these impairment assessments was to test the issuer's process and the firm used an auditor-employed specialist to evaluate certain significant assumptions the company's specialist used. The following deficiencies were identified: · The firm did not perform procedures to test or test controls over the accuracy and completeness of (1) historical financial information the firm used in evaluating the reasonableness of the significant assumptions related to forecasted cash flows and (2) the carrying value of certain asset groups. (AS 1105.10) Financial statement audit only | AS 1105.10 | Significant risk |
| 5 | Goodwill | The issuer engaged a specialist to perform assessments of goodwill and intangible assets for possible impairment using various significant assumptions including assumptions related to forecasted cash flows. The firm's approach to evaluate these impairment assessments was to test the issuer's process and the firm used an auditor-employed specialist to evaluate certain significant assumptions the company's specialist used. The following deficiencies were identified: · For the assessments of intangible assets and goodwill the firm did not (1) perform any procedures to evaluate the reasonableness of a significant assumption developed by the company's specialist or (2) identify that the auditor-employed specialist did not perform procedures to evaluate the reasonableness of a component of another significant assumption developed by the company's specialist. (AS 1105.A8b; AS 1201.C6 and .C7) Financial statement audit only | AS 1105.A8b; AS 1201.C6; AS 1201.C7 | Significant risk |
| 6 | Goodwill | The issuer engaged a specialist to perform assessments of goodwill and intangible assets for possible impairment using various significant assumptions including assumptions related to forecasted cash flows. The firm's approach to evaluate these impairment assessments was to test the issuer's process and the firm used an auditor-employed specialist to evaluate certain significant assumptions the company's specialist used. The following deficiencies were identified: · For the assessments of intangible assets and goodwill for one reporting unit the firm did not sufficiently evaluate the reasonableness of significant assumptions developed by the issuer related to forecasted cash flows because its procedures were limited to (1) comparing the assumptions for one forecasted period to historical experience and (2) reviewing new revenue contracts that represented a small percentage of forecasted revenue. (AS 2501.16) Financial statement audit only | AS 2501.16 | Significant risk |
| 7 | Goodwill | The issuer engaged a specialist to perform assessments of goodwill and intangible assets for possible impairment using various significant assumptions including assumptions related to forecasted cash flows. The firm's approach to evaluate these impairment assessments was to test the issuer's process and the firm used an auditor-employed specialist to evaluate certain significant assumptions the company's specialist used. The following deficiencies were identified: · For the assessments of certain intangible assets and goodwill for another reporting unit the firm did not evaluate the relevance and reliability of certain industry information it used in evaluating the reasonableness of the significant assumptions related to forecasted cash flows. (AS 1105.04 and .06) Financial statement audit only | AS 1105.4; AS 1105.6 | Significant risk |
| 8 | Financial Statement Presentation | During the year the issuer disposed of two business units. The firm did not perform sufficient procedures to evaluate whether these business units should have been reported as discontinued operations in conformity with FASB ASC Topic 205 Presentation of Financial Statements because it did not consider certain information in evaluating whether the discontinued operations represented a strategic shift. (AS 2301.08) Financial statement audit only | AS 2301.8 |
Issuer D10 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Inventory | The issuer used multiple service organizations to host and/or maintain an information-technology (IT) system that the issuer used to initiate process and record transactions related to revenue and related accounts inventory and long-lived assets at certain business units. In its testing of controls over these accounts the firm tested various automated and IT-dependent manual controls that used data and reports generated or maintained by this IT system. As a result of the deficiencies in the firm's testing of IT general controls (ITGCs) discussed below the firm's testing of these automated and IT-dependent manual controls was not sufficient. (AS 2201.46) Both financial statement and ICFR audits | AS 2201.46 | |
| 2 | Inventory | The firm obtained the service auditor's reports for these service organizations and identified certain complementary user controls that the service auditor's reports described as necessary. These service organizations used sub-service organizations for certain functions. The following deficiencies were identified: · The firm selected for testing complementary user controls over the issuer's granting and monitoring of user access to this system but did not evaluate the specific review procedures that the control owners performed to determine whether to grant access to users or whether access that had been previously approved continued to be appropriate. (AS 2201.42 .44 and .B22) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44; AS 2201.B22 | |
| 3 | Inventory | The firm obtained the service auditor's reports for these service organizations and identified certain complementary user controls that the service auditor's reports described as necessary. These service organizations used sub-service organizations for certain functions. The following deficiencies were identified: · The firm selected for testing a complementary user control over change management. The firm did not perform sufficient procedures to test or test controls over the completeness of the population of changes that the firm used in its testing of this control because it did not evaluate whether the system was configured to track all changes made to the production environment. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 4 | Inventory | The firm obtained the service auditor's reports for these service organizations and identified certain complementary user controls that the service auditor's reports described as necessary. These service organizations used sub-service organizations for certain functions. The following deficiencies were identified: · The firm did not perform procedures beyond inquiry to evaluate whether the issuer had implemented certain other complementary user controls. (AS 2201.39 and .B22) Both financial statement and ICFR audits | AS 2201.39; AS 2201.B22 | |
| 5 | Inventory | The firm obtained the service auditor's reports for these service organizations and identified certain complementary user controls that the service auditor's reports described as necessary. These service organizations used sub-service organizations for certain functions. The following deficiencies were identified: · The firm did not obtain an understanding of or test any relevant controls at certain sub-service organizations. (AS 2201.39 and .B19) Both financial statement and ICFR audits | AS 2201.39; AS 2201.B19 | |
| 6 | Revenue | For revenue at three business units which was affected by the ITGC audit deficiencies discussed above the firm selected for testing various controls that addressed the recognition of revenue when performance obligations were satisfied. The firm did not identify and test any controls over the accuracy and completeness of certain information used in the operation of these controls. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 7 | Inventory | For inventory at two business units which was affected by the ITGC audit deficiencies discussed above the following additional deficiencies were identified: · The firm selected for testing controls that consisted of the issuer's performance of physical inventory counts. The firm did not test the aspects of these controls that addressed whether an accurate and complete count had occurred. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 8 | Inventory | For inventory at two business units which was affected by the ITGC audit deficiencies discussed above the following additional deficiencies were identified: · The firm did not perform any procedures to evaluate the issuer's classification of certain items as inventory. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 | |
| 9 | Long-Lived Assets | For long-lived assets at one business unit which was affected by the ITGC audit deficiencies discussed above the following additional deficiencies were identified: · The firm did not identify and test any controls related to the issuer's evaluation of long-lived assets for possible impairment. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 10 | Long-Lived Assets | For long-lived assets at one business unit which was affected by the ITGC audit deficiencies discussed above the following additional deficiencies were identified: · The firm did not perform any substantive procedures to test long-lived assets for possible impairment. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 |
Issuer E4 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue and Related Accounts | The issuer recognized revenue from certain contracts related to the development and sale of real estate. In conjunction with these contracts the issuer received deposits from customers that were recorded as deferred revenue. The following deficiencies were identified: · The firm did not identify and evaluate the issuer's omission of certain disclosures required under FASB ASC Topic 606 related to unsatisfied (or partially unsatisfied) performance obligations and when the issuer expects to recognize this revenue. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 | |
| 2 | Revenue and Related Accounts | The issuer recognized revenue from certain contracts related to the development and sale of real estate. In conjunction with these contracts the issuer received deposits from customers that were recorded as deferred revenue. The following deficiencies were identified: · The firm did not evaluate the appropriateness of the issuer's classification of deferred revenue associated with these contracts as a current liability. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 3 | Related Party Transactions | During the year the issuer recorded a credit loss associated with amounts owed by a related party. The firm did not evaluate whether the business purpose (or the lack thereof) of this transaction indicated that it may have been entered into to engage in fraudulent financial reporting or conceal misappropriation of assets given certain facts regarding this transaction. (AS 2401.67; AS 2410.11) Financial statement audit only | AS 2401.67; AS 2410.11 | Significant risk |
| 4 | Long-Lived Assets | The firm did not perform any substantive procedures to test certain long-lived assets for possible impairment. (AS 2301.08) Financial statement audit only | AS 2301.8 |
Issuer F10 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Business Combinations | During the year the issuer acquired multiple businesses and engaged specialists to determine the fair values of certain acquired assets using various assumptions. For these business combinations the firm's approach to substantively test the fair values of certain of these acquired assets consisted of (1) testing the issuer's process and (2) developing independent expectations of the fair values as a range and the firm used an auditor-employed specialist in each approach. The following deficiencies were identified: · In testing the issuer's process the firm did not identify that the auditor-employed specialist did not perform procedures to evaluate the reasonableness of certain significant assumptions developed by the company's specialists. (AS 1105.A8b; AS 1201.C6 and .C7) Financial statement audit only | AS 1105.A8b; AS 1201.C6; AS 1201.C7 | Significant risk |
| 2 | Business Combinations | During the year the issuer acquired multiple businesses and engaged specialists to determine the fair values of certain acquired assets using various assumptions. For these business combinations the firm's approach to substantively test the fair values of certain of these acquired assets consisted of (1) testing the issuer's process and (2) developing independent expectations of the fair values as a range and the firm used an auditor-employed specialist in each approach. The following deficiencies were identified: · In testing the issuer's process the firm did not perform procedures to test the accuracy of certain issuer-produced data that the company's specialists used to develop the fair values of these assets. (AS 1105.A8a) Financial statement audit only | AS 1105.A8a | Significant risk |
| 3 | Business Combinations | During the year the issuer acquired multiple businesses and engaged specialists to determine the fair values of certain acquired assets using various assumptions. For these business combinations the firm's approach to substantively test the fair values of certain of these acquired assets consisted of (1) testing the issuer's process and (2) developing independent expectations of the fair values as a range and the firm used an auditor-employed specialist in each approach. The following deficiencies were identified: · In developing its independent expectations the firm did not identify that the work of the auditor-employed specialist did not provide sufficient appropriate audit evidence because it did not evaluate whether the independent expectations of the fair values as a range encompassed only reasonable outcomes and were supported by sufficient appropriate audit evidence. (AS 1201.C6 and .C7; AS 2501.25) Financial statement audit only | AS 1201.C6; AS 1201.C7; AS 2501.25 | Significant risk |
| 4 | Business Combinations | During the year the issuer acquired multiple businesses and engaged specialists to determine the fair values of certain acquired assets using various assumptions. For these business combinations the firm's approach to substantively test the fair values of certain of these acquired assets consisted of (1) testing the issuer's process and (2) developing independent expectations of the fair values as a range and the firm used an auditor-employed specialist in each approach. The following deficiencies were identified: · In developing its independent expectations the firm did not identify that the auditor-employed specialist did not evaluate the relevance and reliability of certain external data that it used to develop its independent expectations. (AS 1105.04 and .06; AS 1201.C6 and .C7) Financial statement audit only | AS 1105.4; AS 1105.6; AS 1201.C6; AS 1201.C7 | Significant risk |
| 5 | Business Combinations | For one of these business combinations the firm's approach to substantively test the fair values of certain other acquired intangible assets consisted of testing the issuer's process and the firm used an auditor-employed specialist to evaluate certain significant assumptions that the company's specialists used. The following deficiencies were identified: · The firm did not identify that the auditor-employed specialist did not sufficiently evaluate the reasonableness of a significant assumption developed by the company's specialist because the auditor-employed specialist did not perform any procedures to evaluate the reasonableness of a component of this assumption. (AS 1105.A8b; AS 1201.C6 and .C7) Financial statement audit only | AS 1105.A8b; AS 1201.C6; AS 1201.C7 | Significant risk |
| 6 | Business Combinations | For one of these business combinations the firm's approach to substantively test the fair values of certain other acquired intangible assets consisted of testing the issuer's process and the firm used an auditor-employed specialist to evaluate certain significant assumptions that the company's specialists used. The following deficiencies were identified: · The firm did not identify that the auditor-employed specialist did not evaluate the relevance and reliability of (1) external data that the company's specialist used to develop a significant assumption and (2) other external data that the auditor-employed specialist used to evaluate the reasonableness of other significant assumptions. (AS 1105.04 .06 and .A8a; AS 1201.C6 and .C7) Financial statement audit only | AS 1105.4; AS 1105.6; AS 1105.A8a; AS 1201.C6; AS 1201.C7 | Significant risk |
| 7 | Business Combinations | For one of these business combinations the firm's approach to substantively test the fair values of certain other acquired intangible assets consisted of testing the issuer's process and the firm used an auditor-employed specialist to evaluate certain significant assumptions that the company's specialists used. The following deficiencies were identified: · The firm did not evaluate the reliability of certain other information that the firm used to evaluate the reasonableness of certain significant assumptions developed by the issuer. (AS 1105.04 and .06) Financial statement audit only | AS 1105.4; AS 1105.6 | Significant risk |
| 8 | Business Combinations | The firm did not identify and evaluate the issuer's omission of certain disclosures required under FASB ASC Topic 820 Fair Value Measurement related to certain acquired assets. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 | Significant risk |
| 9 | Revenue | The firm did not perform procedures to test or test controls over the accuracy and completeness of certain issuer-produced information that the firm used in its substantive testing. (AS 1105.10) Financial statement audit only | AS 1105.10 | |
| 10 | Revenue | The firm did not identify and evaluate the issuer's omission of certain disclosures required under FASB ASC Topic 606 related to a description of the nature of certain services the issuer promised to transfer. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 |
Issuer G5 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer recorded certain revenue based on data in an electronic environment that were tracked by an IT system. To test this revenue the firm (1) sent positive confirmation requests to the issuer's customers with revenue over an established threshold and (2) selected a sample of transactions for testing. The following deficiencies were identified: · The firm's confirmation procedures were not sufficient because the firm did not consider whether the issuer's customers would have the information necessary to confirm that the issuer's performance obligations had been satisfied. (AS 2310.26) Financial statement audit only | AS 2310.26 | |
| 2 | Revenue | The issuer recorded certain revenue based on data in an electronic environment that were tracked by an IT system. To test this revenue the firm (1) sent positive confirmation requests to the issuer's customers with revenue over an established threshold and (2) selected a sample of transactions for testing. The following deficiencies were identified: · The firm did not evaluate whether the transaction prices allocated to the issuer's performance obligations were based on standalone selling prices. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 3 | Revenue | For another type of revenue the firm did not perform procedures to test whether the issuer's performance obligation had been satisfied before revenue was recognized. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 4 | Revenue | The firm did not identify and evaluate the issuer's omission of a required disclosure under FASB ASC Topic 606 related to significant payment terms. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 | |
| 5 | Going Concern | The issuer evaluated its ability to continue as a going concern and concluded that the substantial doubt was alleviated by its plans. The firm did not sufficiently evaluate the reliability of management's plans because it did not (1) evaluate management's ability to increase revenue and (2) take into account certain conditions and events that could affect revenue growth. (AS 1105.04 and .06; AS 2415.03 .08 and .09) Financial statement audit only | AS 1105.4; AS 1105.6; AS 2415.3; AS 2415.8; AS 2415.9 |
Issuer H5 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Goodwill | The issuer engaged a specialist to perform an assessment of its goodwill for possible impairment and the firm selected for testing a control that consisted of the issuer's review of this assessment. The firm did not evaluate the specific review procedures the control owner performed to assess the reasonableness of a significant assumption used in this assessment. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | Significant risk |
| 2 | Goodwill | The firm's approach to substantively test the issuer's goodwill impairment assessment consisted of developing an independent expectation of the fair value of the issuer's single reporting unit as a range using an auditor-employed specialist. The following deficiencies were identified: · The firm did not evaluate whether the auditor-employed specialist's independent expectation of the fair value as a range encompassed only reasonable outcomes and was supported by sufficient appropriate audit evidence. (AS 1201.C6 and .C7; AS 2501.25) Both financial statement and ICFR audits | AS 1201.C6; AS 1201.C7; AS 2501.25 | Significant risk |
| 3 | Goodwill | The firm's approach to substantively test the issuer's goodwill impairment assessment consisted of developing an independent expectation of the fair value of the issuer's single reporting unit as a range using an auditor-employed specialist. The following deficiencies were identified: · The firm did not identify that the auditor-employed specialist did not perform procedures to evaluate the relevance of data from external sources it used to develop the independent expectation as a range. (AS 1105.04 and .06; AS 1201.C6 and .C7) Both financial statement and ICFR audits | AS 1105.4; AS 1105.6; AS 1201.C6; AS 1201.C7 | Significant risk |
| 4 | Inventory | The issuer estimated the cost of certain inventory using various significant assumptions. The firm's approach for substantively testing the valuation of this inventory was to test the issuer's process. The following deficiencies were identified: · The firm's approach for evaluating the reasonableness of certain significant assumptions was to develop expectations of these assumptions. The firm did not perform sufficient procedures to demonstrate it had a reasonable basis for its expectations because it limited the development of these expectations to the results of its tests of certain varieties of inventory items. (AS 2501.16) Both financial statement and ICFR audits | AS 2501.16 | Significant risk |
| 5 | Inventory | The issuer estimated the cost of certain inventory using various significant assumptions. The firm's approach for substantively testing the valuation of this inventory was to test the issuer's process. The following deficiencies were identified: · The firm did not perform procedures to test or test controls over the accuracy and/or completeness of certain issuer-produced information that the firm used in its substantive testing of inventory. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | Significant risk |
Issuer I2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm did not perform procedures to test or test controls over the accuracy and completeness of certain issuer-produced information that it used in its testing of (1) certain revenue and (2) the issuer's disclosure related to the remaining performance obligations. (AS 1105.10) Financial statement audit only | AS 1105.10 | |
| 2 | Intangible Assets | The firm did not perform any substantive procedures to test intangible assets for possible impairment. (AS 2301.08) Financial statement audit only | AS 2301.8 |
Issuer J6 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Expenses | The firm's internal inspection program had inspected this audit and reviewed the ITGCs area and also identified the deficiency below. The issuer used an IT system to initiate process and record transactions related to certain expenses and long-lived assets. The firm identified various control deficiencies in its testing of ITGCs over this system but did not sufficiently evaluate whether these deficiencies represented a material weakness because the firm did not evaluate the magnitude of the potential misstatements resulting from these deficiencies. (AS 2201.62) Both financial statement and ICFR audits | AS 2201.62 | |
| 2 | Expenses | The firm's internal inspection program had inspected this audit and reviewed the ITGCs area and also identified the deficiency below. The issuer used an IT system to initiate process and record transactions related to certain expenses and long-lived assets. In its testing of controls over these accounts the firm tested various IT-dependent manual controls that used data and reports generated from this system. As a result of this deficiency in the firm's evaluation the firm's testing of these IT-dependent manual controls was not sufficient. (AS 2201.46) Both financial statement and ICFR audits | AS 2201.46 | |
| 3 | Expenses | The firm's internal inspection program had inspected this audit and reviewed the ITGCs area and also identified the deficiency below. The issuer included payroll and other costs as components of these expenses which were affected by the audit deficiencies discussed above. The following additional deficiencies were identified: · The firm did not evaluate whether the controls it selected for testing were designed to address the risk of whether the issuer had appropriately classified these payroll and other costs. (AS 2201.42) Both financial statement and ICFR audits | AS 2201.42 | |
| 4 | Expenses | The firm's internal inspection program had inspected this audit and reviewed the ITGCs area and also identified the deficiency below. The issuer included payroll and other costs as components of these expenses which were affected by the audit deficiencies discussed above. The following additional deficiencies were identified: · The firm did not perform any substantive procedures to test whether the issuer had appropriately classified these payroll costs. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 | |
| 5 | Long-Lived Assets | The firm's internal inspection program had inspected this audit and reviewed the ITGCs area and also identified the deficiency below. The firm selected for testing a control which was affected by the audit deficiencies discussed above that included the issuer's review of certain long-lived assets for possible impairment. The firm did not evaluate the specific review procedures that the control owner performed to assess certain indicators of possible impairment. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 6 | Long-Lived Assets | The firm's internal inspection program had inspected this audit and reviewed the ITGCs area and also identified the deficiency below. The firm did not perform any substantive procedures to test these long-lived assets for possible impairment. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 |
Issuer K3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer recognized revenue from contracts with customers that included an estimate of variable consideration in the transaction price; the issuer estimated this variable consideration using a portfolio of contracts approach. The following deficiencies were identified: · The firm did not evaluate whether the issuer's method to estimate variable consideration was in conformity with FASB ASC Topic 606 and appropriate for the nature of the revenue. (AS 2501.10) Financial statement audit only | AS 2501.10 | |
| 2 | Revenue | The issuer recognized revenue from contracts with customers that included an estimate of variable consideration in the transaction price; the issuer estimated this variable consideration using a portfolio of contracts approach. The following deficiencies were identified: · The firm used an issuer-prepared schedule of cash receipts by invoice in its substantive testing of the variable consideration estimate. The firm did not sufficiently test or test controls over the accuracy of this schedule because it did not perform procedures to evaluate whether the cash receipts throughout the period related to the associated invoices. (AS 1105.10) Financial statement audit only | AS 1105.10 | |
| 3 | Revenue | The sample size the firm used in its substantive procedures to test this revenue was too small to provide sufficient appropriate audit evidence because in determining the sample size the firm did not take into account tolerable misstatement the allowable risk of incorrect acceptance and the characteristics of the population. (AS 2315.16 .23 and .23A) Financial statement audit only | AS 2315.16; AS 2315.23; AS 2315.23A |
Issuer L2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Going Concern | The issuer used forecasted financial information in its evaluation of its ability to continue as a going concern and concluded that substantial doubt was alleviated by its plans. In evaluating management's plans the firm did not sufficiently evaluate the reliability of the issuer's forecasted financial information as follows: · The firm compared the forecasted revenue to the issuer's results subsequent to year end but did not evaluate the significant difference it identified. Further the firm did not evaluate whether the issuer's recent reduction in workforce would affect its ability to achieve its forecasted revenue growth. (AS 1105.04 and .06; AS 2415.03 .08 and .09) Financial statement audit only | AS 1105.4; AS 1105.6; AS 2415.3; AS 2415.8; AS 2415.9 | Significant risk |
| 2 | Going Concern | The issuer used forecasted financial information in its evaluation of its ability to continue as a going concern and concluded that substantial doubt was alleviated by its plans. In evaluating management's plans the firm did not sufficiently evaluate the reliability of the issuer's forecasted financial information as follows: · The firm did not compare certain forecasted expenditures with the issuer's results subsequent to year end. (AS 1105.04 and .06; AS 2415.09) Financial statement audit only | AS 1105.4; AS 1105.6; AS 2415.9 | Significant risk |
Issuer M3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Derivatives | During the year the issuer entered into certain equity-related agreements; the issuer accounted for each of these agreements as one or more derivatives. The following deficiencies were identified: · The firm did not evaluate whether the issuer's accounting for one of these agreements was in conformity with FASB ASC Topic 815 Derivatives and Hedging. (AS 2301.08) Financial statement audit only | AS 2301.8 | Significant risk |
| 2 | Derivatives | During the year the issuer entered into certain equity-related agreements; the issuer accounted for each of these agreements as one or more derivatives. The following deficiencies were identified: · The firm's approach to substantively test the fair values of these derivatives at issuance and year end was to test the issuer's process. The firm did not perform procedures to evaluate the reasonableness of certain significant assumptions used in the valuation of these derivatives at issuance and year end beyond reading an issuer-prepared memorandum and inquiring of management and for one of the agreements a counterparty. (AS 2501.16) Financial statement audit only | AS 2501.16 | Significant risk |
| 3 | Derivatives | During the year the issuer entered into certain equity-related agreements; the issuer accounted for each of these agreements as one or more derivatives. The following deficiencies were identified: · The firm did not identify and evaluate the issuer's omission of certain disclosures required under FASB ASC Topic 820 related to the valuation of these derivatives at issuance and year end. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 | Significant risk |
Issuer N3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Debt | The firm did not perform any substantive procedures to test the issuer's compliance with certain financial debt covenants. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 2 | Debt | The firm did not identify and evaluate (1) a misstatement in the issuer's statement of cash flows related to proceeds and repayments of debt; (2) the issuer's omission of a required disclosure under FASB ASC Topic 210 Balance Sheet related to the remaining borrowing capacity for certain debt; and (3) misstatements in certain disclosures required under FASB ASC Topic 820 and FASB ASC Topic 825 Financial Instruments related to the issuer's accounting for and measurement of certain other debt. (AS 2810.30 and .31) In connection with our review the issuer reevaluated its presentation of the statement of cash flows and concluded that a misstatement existed that had not been previously identified. The issuer corrected this misstatement in a subsequent filing. Financial statement audit only | AS 2810.30; AS 2810.31 | |
| 3 | Long-Lived Assets | The issuer performed an assessment of certain of its long-lived assets for possible impairment at year end and concluded that the carrying value of these assets was recoverable. The firm did not identify that the issuer did not consider certain indicators of possible impairment in its assessment of these assets. (AS 2301.08; AS 2810.03) Financial statement audit only | AS 2301.8; AS 2810.3 |
Issuer O3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Investments | The issuer used various service organizations for the custody recordkeeping and processing of investment transactions and these service organizations used sub-service organizations for certain functions. For certain sub-service organizations and one service organization the firm did not obtain an understanding of or test any relevant controls for the year under audit. (AS 2201.39 and .B19) ICFR audit only | AS 2201.39; AS 2201.B19 | |
| 2 | Investments | The firm obtained the service auditor's reports for certain of these service organizations and identified certain complementary user controls that the service auditor's reports described as necessary. The following deficiencies were identified: · The firm selected for testing a complementary user control that addressed the issuer's review of updates to its investment policies but did not test the design and operating effectiveness of this control. (AS 2201.39 and .B22) ICFR audit only | AS 2201.39; AS 2201.B22 | |
| 3 | Investments | The firm obtained the service auditor's reports for certain of these service organizations and identified certain complementary user controls that the service auditor's reports described as necessary. The following deficiencies were identified: · The firm did not perform any procedures to evaluate whether the issuer implemented certain other complementary user controls as described in the service auditor's reports. (AS 2201.39 and .B22) ICFR audit only | AS 2201.39; AS 2201.B22 |
Issuer P2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Journal Entries | For one business unit the firm did not perform any procedures to identify and select journal entries and other adjustments for testing without having an appropriate basis for excluding this business unit. (AS 2401.61) Financial statement audit only | AS 2401.61 | |
| 2 | Revenue | The firm did not identify and evaluate the issuer's omission of certain disclosures required under FASB ASC Topic 606 related to revenue that is recognized over time. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 |
Issuer Q2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer recognized revenue from certain contracts over time using an input method based on costs incurred. The following deficiencies were identified: · The firm did not perform substantive procedures to evaluate whether the costs incurred had been allocated to the appropriate contract. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 2 | Revenue | The issuer recognized revenue from certain contracts over time using an input method based on costs incurred. The following deficiencies were identified: · The firm used certain labor information in its substantive testing of the costs incurred but did not test or test controls over the accuracy of this information. (AS 1105.10) Financial statement audit only | AS 1105.10 |
Issuer R2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Goodwill | During the year the issuer engaged a specialist to perform a quantitative assessment of goodwill for one reporting unit for possible impairment. The firm used an auditor-employed specialist to evaluate certain significant assumptions used in the issuer's assessment. For certain of these significant assumptions the firm did not identify that the auditor-employed specialist did not (1) perform procedures beyond inquiring of the company's specialist to evaluate the reasonableness of these assumptions and (2) evaluate the relevance and/or reliability of certain data from an external source the company's specialist used to develop these assumptions. (AS 1105.A8a and .A8b; AS 1201.C6 and .C7) Financial statement audit only | AS 1105.A8a; AS 1105.A8b; AS 1201.C6; AS 1201.C7 | |
| 2 | Goodwill | At year end the issuer concluded that it was not necessary to perform an additional quantitative assessment of goodwill for this reporting unit. The firm did not sufficiently evaluate the issuer's conclusion because it did not evaluate the issuer's basis for concluding that certain events and circumstances that occurred during the year did not indicate that it was more likely than not that the fair value of this reporting unit was below its carrying amount. (AS 2301.08; AS 2810.03) Financial statement audit only | AS 2301.8; AS 2810.3 |
Issuer S1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Intangible Assets | The issuer performed assessments of certain intangible assets for possible impairment using various significant assumptions. The firm's approach to evaluate these impairment assessments was to test the issuer's process. The firm did not perform procedures beyond inquiring of management to evaluate the reasonableness of certain significant assumptions used in these impairment assessments. (AS 2501.16) Financial statement audit only | AS 2501.16 | Significant risk |
Issuer T1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Debt | The issuer reported convertible debt that was measured at fair value. The firm did not perform procedures beyond inquiring of management to evaluate the reasonableness of a significant assumption used by the issuer to determine the fair value of the convertible debt. (AS 2501.16) Financial statement audit only | AS 2501.16 | Significant risk |
Issuer U1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Warrants | The issuer reported warrants that were recorded as liabilities. The firm did not identify and evaluate the issuer's omission of and a misstatement in certain required disclosures under FASB ASC Topic 820 related to these warrants. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 |