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Grant Thornton Zhitong Certified Public Accountants LLP
China · Grant Thornton International Limited · Triennially Inspected
- Inspection year
- 2024
- Report date
- 11-Sep-2025
- PCAOB release
- 104-2025-137
- Audits reviewed
- 3
- Audits w/ Part I.A deficiencies
- 1
- Part I.A deficiency rate
- 33%
- Part I.A deficiencies
- 16
- Part I.B deficiencies
- 9
- 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 A16 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Accounts Receivable | The issuer used multiple information-technology (IT) systems to initiate process and record transactions related to certain revenue and the related accounts receivable. 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 these IT systems. As a result of the following deficiencies in the firm's testing of IT general controls (ITGCs) 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 | Accounts Receivable | The firm selected for testing various user access and change management controls over these IT systems that consisted of the issuer's reviews of (1) the granting and monitoring of user access and (2) changes to the production environment of these IT systems. The following deficiency was identified: · The firm did not perform sufficient procedures to test the design of these controls because it did not evaluate whether (1) the controls were designed to satisfy the issuer's control objectives and (2) the control owners possessed the necessary authority and competence to perform the controls. (AS 2201.42) Both financial statement and ICFR audits | AS 2201.42 | |
| 3 | Accounts Receivable | The firm selected for testing various user access and change management controls over these IT systems that consisted of the issuer's reviews of (1) the granting and monitoring of user access and (2) changes to the production environment of these IT systems. The following deficiency was identified: · The firm did not identify and test any controls over the accuracy and completeness of certain system-generated information that were used in the operation of these controls. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 4 | Accounts Receivable | The firm selected for testing various user access and change management controls over these IT systems that consisted of the issuer's reviews of (1) the granting and monitoring of user access and (2) changes to the production environment of these IT systems. The following deficiency was identified: · The firm used certain system-generated information (1) in its testing of these controls and/or (2) to make selections to test certain controls but did not perform procedures to test or test any controls over the accuracy and/or completeness of this information. Further the firm used other information in its testing of certain of these controls but did not sufficiently test or test controls over the accuracy and completeness of this information because it did not test how the information was generated. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 5 | Accounts Receivable | The firm selected for testing various user access and change management controls over these IT systems that consisted of the issuer's reviews of (1) the granting and monitoring of user access and (2) changes to the production environment of these IT systems. The following deficiency was identified: · In its testing of a control over user access the firm identified a deviation indicating that an individual may have had inappropriate access to one of these systems. The firm determined that this deviation did not affect its conclusion on the operating effectiveness of this control based on certain system-generated information provided by the issuer. The firm did not sufficiently evaluate the effect of this deviation on the operating effectiveness of this control because it did not test or test controls over the accuracy and completeness of this information. (AS 1105.10; AS 2201.48) Both financial statement and ICFR audits | AS 1105.10; AS 2201.48 | |
| 6 | Accounts Receivable | As a result of the firm's ITGC testing deficiencies the firm did not perform sufficient substantive procedures over this revenue and the related accounts receivable as follows: · The sample sizes that the firm used in certain of its substantive procedures to test these accounts 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 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 | |
| 7 | Accounts Receivable | As a result of the firm's ITGC testing deficiencies the firm did not perform sufficient substantive procedures over this revenue and the related accounts receivable as follows: · The firm did not perform sufficient procedures to test or sufficiently test controls over the accuracy and completeness of certain system-generated information that the firm used in its substantive testing. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 8 | Accounts Receivable | The following additional deficiency was identified: • The firm selected for testing controls that consisted of the issuer's reviews of the sales return reserve and the allowance for doubtful accounts. The firm did not evaluate the review procedures that 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 | |
| 9 | Accounts Receivable | The following additional deficiency was identified: • The firm's approach to substantively test the allowance for doubtful accounts was to test the issuer's process. The firm did not perform procedures beyond reading an issuer-prepared memorandum to evaluate the reasonableness of the significant assumptions the issuer used to develop this allowance. (AS 2501.16) Both financial statement and ICFR audits | AS 2501.16 | |
| 10 | Investment Securities | The issuer reported investment securities that were held within various investment funds managed by external parties. The following deficiency was identified: • The firm selected for testing a control that consisted of the issuer's review of the fair values of these investments. The firm did not identify and test any controls that addressed the reliability of pricing information obtained from the external parties that were used in the operation of this control. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 11 | Investment Securities | The issuer reported investment securities that were held within various investment funds managed by external parties. The following deficiency was identified: • The firm did not perform substantive procedures to test the valuation of these investments beyond (1) comparing their reported fair values to the statements obtained from the external parties that managed the respective investment funds and (2) for a selection of investment funds testing the fair values of certain underlying investments while excluding others from testing. (AS 2501.07) Both financial statement and ICFR audits | AS 2501.7 | |
| 12 | Investment Securities | The issuer reported investment securities that were held within various investment funds managed by external parties. The following deficiency was identified: • The firm did not identify and evaluate a departure from GAAP related to the issuer's presentation of the fair value and non-fair value amounts of these investments within the same short-term and long-term line items in its balance sheet rather than presenting them as separate line items or parenthetically disclosing the amounts measured at fair value included in the aggregate amounts in conformity with FASB ASC Topic 825 Financial Instruments. (AS 2810.30 and .31) Both financial statement and ICFR audits | AS 2810.30; AS 2810.31 | |
| 13 | Investment Securities | The issuer reported investment securities that were held within various investment funds managed by external parties. The following deficiency was identified: • The firm did not identify and evaluate another departure from GAAP related to the issuer's inclusion of certain investments within its fair value hierarchy disclosure rather than excluding them in conformity with FASB ASC Topic 820 Fair Value Measurement. (AS 2810.30 and .31) Both financial statement and ICFR audits | AS 2810.30; AS 2810.31 | |
| 14 | Investment Securities | The issuer reported investment securities that were held within various investment funds managed by external parties. The following deficiency was identified: • The firm did not identify and evaluate other departures from GAAP related to the issuer's omission of and/or misstatements in certain disclosures required under FASB ASC Topic 320 Investments – Debt Securities and FASB ASC Topic 820 regarding the nature of these investments and the methods used to determine their fair values. (AS 2810.30 and .31) Both financial statement and ICFR audits | AS 2810.30; AS 2810.31 | |
| 15 | Cost of Sales | The firm did not identify and test any controls that addressed the appropriateness of the expenses included within cost of sales. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 16 | Cost of Sales | The firm did not perform any procedures to evaluate the appropriateness of the issuer's inclusion of certain compensation expenses within cost of sales. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 |