- Inspection year
- 2024
- Report date
- 24-Jul-2025
- PCAOB release
- 104-2025-132
- Audits reviewed
- 2
- Audits w/ Part I.A deficiencies
- 2
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 14
- Part I.B deficiencies
- 11
- 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 A13 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Accounts Receivable | The issuer used multiple information-technology (IT) systems to initiate process and record transactions related to revenue accounts receivable and unbilled receivables. In its testing of controls over these accounts the firm tested various IT-dependent manual controls that used data and reports generated or maintained by these IT systems. As a result of the deficiencies in the firm's testing of IT general controls (ITGCs) 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 | |
| 2 | Accounts Receivable | The issuer used multiple information-technology (IT) systems to initiate process and record transactions related to revenue accounts receivable and unbilled receivables. In its testing of controls over these accounts the firm tested various IT-dependent manual controls that used data and reports generated or maintained by these IT systems. As a result of the following deficiency in the firm's testing of IT general controls (ITGCs) the firm's testing of these IT-dependent manual controls was not sufficient. • The firm selected for testing certain controls over change management and user access but did not test or test any controls over the completeness of the population from which it selected its samples for testing. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 3 | Accounts Receivable | The issuer used multiple information-technology (IT) systems to initiate process and record transactions related to revenue accounts receivable and unbilled receivables. In its testing of controls over these accounts the firm tested various IT-dependent manual controls that used data and reports generated or maintained by these IT systems. As a result of the following deficiency in the firm's testing of IT general controls (ITGCs) the firm's testing of these IT-dependent manual controls was not sufficient. • The firm did not identify and test controls that addressed the risk that users with the ability to develop changes also have the ability to implement those changes. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 4 | Accounts Receivable | The issuer used multiple information-technology (IT) systems to initiate process and record transactions related to revenue accounts receivable and unbilled receivables. In its testing of controls over these accounts the firm tested various IT-dependent manual controls that used data and reports generated or maintained by these IT systems. As a result of the following deficiency in the firm's testing of IT general controls (ITGCs) the firm's testing of these IT-dependent manual controls was not sufficient. • The firm selected for testing a control over logical access to several IT systems but did not test the aspect of this control related to these IT systems. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 5 | Accounts Receivable | For revenue accounts receivable and unbilled receivables the following additional deficiency was identified: · The firm selected for testing certain controls that consisted of the issuer's review of certain aspects of revenue accounts receivable and unbilled receivables. The firm did not perform procedures to evaluate the review procedures the control owners performed including the procedures to identify items for follow up and the procedures to determine whether those items were appropriately resolved. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 6 | Accounts Receivable | For revenue accounts receivable and unbilled receivables the following additional deficiency was identified: · The firm selected for testing a control over the review of the accuracy of invoices. The firm identified deviations in the operation of this control but did not determine the effect of these deviations on the operating effectiveness of this control. (AS 2201.48) Both financial statement and ICFR audits | AS 2201.48 | |
| 7 | Accounts Receivable | With respect to the firm's substantive procedures the following deficiency was identified: · The sample sizes that the firm used in certain of its substantive procedures to test revenue and accounts receivable were too small to provide sufficient appropriate audit evidence because these procedures were designed based on (1) a level of control reliance that was not supported due to (a) the deficiencies in the firm's control testing discussed above and (b) the firm not obtaining evidence that a control over change management which it selected for testing was operating effectively during the entire period of reliance and (2) an assessment of risk for other substantive tests related to the same assertion that was not supported as the engagement team did not perform any other substantive procedures to test the same assertions. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A) Both financial statement and ICFR audits | AS 2301.16; AS 2301.18; AS 2301.37; AS 2315.19; AS 2315.23; AS 2315.23A | |
| 8 | Unbilled Receivables | With respect to the firm's substantive procedures the following deficiency was identified: · The firm did not perform substantive procedures to test unbilled receivables. (AS 2301.08 and .13) Both financial statement and ICFR audits | AS 2301.8; AS 2301.13 | |
| 9 | Accounts Receivable | With respect to the firm's substantive procedures the following deficiency was identified: · The firm did not perform substantive procedures to test the allowance for doubtful accounts. (AS 2501.07) Both financial statement and ICFR audits | AS 2501.7 | |
| 10 | Revenue | With respect to the firm's substantive procedures the following deficiency was identified: · The firm did not perform procedures to test or sufficiently test controls over as discussed above the accuracy and completeness of information and reports that it used in its substantive procedures to test revenue. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 11 | Insurance-Related Liabilities | The issuer engaged an external specialist to estimate an insurance-related liability. The firm engaged another specialist to test this liability. The following deficiency was identified: · The firm did not identify and test controls that addressed (1) the reasonableness of the company's specialist's estimate of this liability and (2) the accuracy and completeness of data and reasonableness of assumptions which were developed by the issuer that the company's specialist used to develop the estimate of this liability. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 12 | Insurance-Related Liabilities | The issuer engaged an external specialist to estimate an insurance-related liability. The firm engaged another specialist to test this liability. The following deficiency was identified: · The firm did not perform procedures beyond obtaining and reading the issuer's analysis to evaluate whether the issuer's recognition of this liability was appropriate including evaluation of certain contrary information included in its work papers. (AS 2301.08; AS 2810.03) Both financial statement and ICFR audits | AS 2301.8; AS 2810.3 | |
| 13 | Insurance-Related Liabilities | The issuer engaged an external specialist to estimate an insurance-related liability. The firm engaged another specialist to test this liability. The following deficiency was identified: · The firm did not evaluate whether the auditor-engaged specialist's work provided sufficient appropriate audit evidence because it did not identify that the specialist did not perform substantive procedures to test this liability beyond inquiry and obtaining and reading the report prepared by the company's specialist. Further the firm did not perform any procedures with respect to its use of the work of the (1) company's specialist as audit evidence and (2) auditor-engaged specialist as audit evidence beyond obtaining an independence confirmation and documenting the resolution of an inquiry by the specialist. (AS 1105.A1 - .A10; AS 1210.03 - .12; AS 2501.07) 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 1210.3; AS 1210.4; AS 1210.5; AS 1210.6; AS 1210.7; AS 1210.8; AS 1210.9; AS 1210.10; AS 1210.11; AS 1210.12; AS 2501.7 |
Issuer B1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Warrants | During the year the issuer issued common stock with warrants. The firm did not perform any procedures to test whether the warrants should have been accounted for as equity or a liability. (AS 2301.08) Financial statement audit only | AS 2301.8 |