- Inspection year
- 2024
- Report date
- 12-Jun-2025
- PCAOB release
- 104-2025-106
- Audits reviewed
- 3
- Audits w/ Part I.A deficiencies
- 2
- Part I.A deficiency rate
- 67%
- Part I.A deficiencies
- 17
- Part I.B deficiencies
- 8
- Report
- View PDF ↗
Deficiencies (17)
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 did not perform sufficient procedures to evaluate whether certain revenue was recognized in conformity with FASB ASC Topic 606 Revenue from Contracts with Customers (“ASC Topic 606”) because it did not perform any procedures to evaluate whether revenue was recognized as the issuer's performance obligation was satisfied. (AS 2301.08 and .11) Financial statement audit only | AS 2301.8; AS 2301.11 | Significant risk |
| 2 | Revenue | For certain other revenue the following deficiency was identified: · The firm did not perform sufficient procedures to test the transaction price because it did not evaluate whether the promised consideration included variable consideration. (AS 2301.08) Financial statement audit only | AS 2301.8 | Significant risk |
| 3 | Revenue | For certain other revenue the following deficiency was identified: · The firm's substantive procedures to test this revenue included testing a sample of transactions. The sample size the firm used 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 as the firm did not identify and test any controls over the revenue. (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 | Significant risk |
| 4 | Revenue | For certain other revenue the following deficiency was identified: · The firm's substantive procedures to test this revenue included testing a sample of transactions. The firm did not take into account appropriate factors in determining its sample size including its established tolerable misstatement for the population the allowable risk of incorrect acceptance and the characteristics of the population. (AS 2315.16 .23 and .23A) Financial statement audit only | AS 2301.16; AS 2315.23; AS 2315.23A | Significant risk |
| 5 | Inventory | The firm used an issuer-prepared report in its substantive procedures to test the inventory reserve but did not perform any procedures to test or test any controls over the accuracy and completeness of this report. (AS 1105.10) Financial statement audit only | AS 1105.10 | Significant risk |
| 6 | Inventory | The firm's substantive procedures to test the valuation of inventory included selecting a sample of inventory items for testing. The firm did not perform any procedures to identify slow-moving inventory for certain inventory items selected for testing. (AS 2301.08 and .11) Financial statement audit only | AS 2301.8; AS 2301.11 | Significant risk |
| 7 | Inventory | The firm's substantive procedures to test whether inventory was stated at the lower of cost or net realizable value included selecting a sample of inventory items for testing. The firm did not perform any procedures to test certain inventory items selected for testing. Further the firm did not perform procedures to test certain other inventory items selected for testing beyond comparing the reported cost of the inventory item to its selling price reflected in the issuer's price list. (AS 2301.08 and .11) Financial statement audit only | AS 2301.8; AS 2301.11 | Significant risk |
| 8 | Journal Entries | The firm selected for testing journal entries and other adjustments meeting certain fraud criteria. The firm did not perform sufficient procedures to test the selected journal entries and other adjustments because it did not examine the underlying support for the entries and adjustments. (AS 2401.61) Financial statement audit only | AS 2401.61 | |
| 9 | Related Party Transactions | The firm did not perform sufficient procedures to evaluate whether the issuer had properly identified accounted for and disclosed its related party relationships and transactions because the firm did not take into account information gathered during the audit that could indicate that related party relationships or transactions previously undisclosed to the firm might exist. (AS 2410.14 .15 and .16) Financial statement audit only | AS 2410.14; AS 2410.15; AS 2410.16 | |
| 10 | Related Party Transactions | In addition the firm did not identify and evaluate a departure from GAAP related to the issuer's omission of certain disclosures required by FASB ASC Topic 850 Related Party Disclosures. (AS 2410.17; AS 2810.30 and .31) Financial statement audit only | AS 2410.17; AS 2810.30; AS 2810.31 |
Issuer B7 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm's substantive procedures to test revenue included testing a sample of transactions. The sample sizes the firm used in certain of its substantive procedures were too small to provide sufficient appropriate audit evidence because these procedures were designed based on a level of control reliance that was not supported as the firm did not identify and test any controls over revenue. (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 | |
| 2 | Revenue | The firm did not perform sufficient procedures to evaluate whether certain revenue was recognized in conformity with ASC Topic 606 because it did not perform any procedures to test whether the revenue was recognized when the issuer's performance obligation was satisfied. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 3 | Revenue | The firm did not perform procedures to evaluate whether the amounts reflected in certain of the issuer's revenue disclosures were accurate and complete beyond performing non-substantive analytical procedures. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 4 | Journal Entries | The firm selected for testing journal entries and other adjustments meeting certain fraud criteria. The firm did not perform sufficient procedures to test the selected journal entries and other adjustments because it did not examine the underlying support for the entries and adjustments. (AS 2401.61) Financial statement audit only | AS 2401.61 | |
| 5 | Related Party Transactions | The firm did not perform sufficient procedures to evaluate whether the issuer had properly identified accounted for and disclosed its related party transactions because the firm did not evaluate whether there were any transactions with certain related parties. (AS 2410.14) Financial statement audit only | AS 2410.14 | Significant risk |
| 6 | Related Party Transactions | The firm did not perform procedures to test the accuracy and completeness of amounts due from related parties beyond sending confirmation requests to certain related parties and inspecting evidence of partial repayment. (AS 2301.08 and .11; AS 2410.12) Financial statement audit only | AS 2301.8; AS 2301.11; AS 2410.12 | Significant risk |
| 7 | Inventory | The firm's substantive procedures to test inventory included testing a sample of inventory items. The sample sizes the firm used in certain of its substantive procedures were too small to provide sufficient appropriate audit evidence because these procedures were designed based on a level of control reliance that was not supported as the firm did not identify and test any controls over inventory. (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 | Significant risk |