- Inspection year
- 2024
- Report date
- 25-Sep-2025
- PCAOB release
- 104-2025-148
- Audits reviewed
- 3
- Audits w/ Part I.A deficiencies
- 3
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 11
- Part I.B deficiencies
- 2
- Report
- View PDF ↗
Deficiencies (11)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A7 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer entered into sales contracts with third-party customers which outlined the specific terms and conditions with the customers. For certain revenue transactions sales orders were generated (and revenue was recognized) based on the quantities of goods sold to the customers that were manually entered into the issuer's accounting system. The following deficiency was identified: • The firm selected for testing a control over the recognition of this revenue that consisted of the issuer's review of new and amended sales contracts. The firm identified a deficiency in the design effectiveness of the control during its interim testing. To test the remediation of this control deficiency the firm selected and tested a sample of new and amended sales contracts once the issuer remediated the deficiency. The firm did not perform procedures to test or test any controls over the completeness of the population of new and amended sales contracts from which it made its selections for testing. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 2 | Revenue | The issuer entered into sales contracts with third-party customers which outlined the specific terms and conditions with the customers. For certain revenue transactions sales orders were generated (and revenue was recognized) based on the quantities of goods sold to the customers that were manually entered into the issuer's accounting system. The following deficiency was identified: • The firm selected for testing a control over the recognition of this revenue that consisted of the issuer's review of new and amended sales contracts. The firm identified a deficiency in the design effectiveness of the control during its interim testing. To test the remediation of this control deficiency the firm selected and tested a sample of new and amended sales contracts once the issuer remediated the deficiency. The firm did not perform sufficient procedures to test the effectiveness of the issuer's remediation of the control deficiency because approximately 44 percent of the new and amended sales contracts selected to test the remediation were entered into or amended prior to the issuer's remediation of the deficiency. (AS 2201.44) Both financial statement and ICFR audits | AS 2201.44 | |
| 3 | Revenue | The issuer entered into sales contracts with third-party customers which outlined the specific terms and conditions with the customers. For certain revenue transactions sales orders were generated (and revenue was recognized) based on the quantities of goods sold to the customers that were manually entered into the issuer's accounting system. The following deficiencies were identified: • The firm identified a process risk point over the recognition of this revenue that did not have an associated control and concluded that a design effectiveness deficiency existed. The firm identified and tested compensating controls that it believed would mitigate the deficiency. The firm did not identify that these compensating controls did not address the risk of material misstatement related to the entry of incorrect quantities of goods sold into the issuer's accounting system. (AS 2201.68) Both financial statement and ICFR audits | AS 2201.68 | |
| 4 | Certain Liabilities | The firm used an auditor-employed specialist to assist it with evaluating the reasonableness of a significant assumption used by the issuer to estimate the fair value of a certain liability. To evaluate the reasonableness of the assumption the auditor-employed specialist developed an expectation of the assumption using certain external data. The following deficiency was identified: • The firm selected for testing a control that consisted of the issuer's review of the assumption. The firm did not evaluate the criteria the control owners used to identify matters for follow-up when assessing the reasonableness of the assumption. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | Significant risk |
| 5 | Certain Liabilities | The firm used an auditor-employed specialist to assist it with evaluating the reasonableness of a significant assumption used by the issuer to estimate the fair value of a certain liability. To evaluate the reasonableness of the assumption the auditor-employed specialist developed an expectation of the assumption using certain external data. The following deficiency was identified: • The firm did not sufficiently evaluate the work of the auditor-employed specialist as it did not identify that the auditor-employed specialist's work did not provide sufficient appropriate audit evidence regarding the significant assumption and perform additional procedures or request the auditor-employed specialist to perform additional procedures as necessary to address the deficiency. (AS 1201.C6 and .C7) Both financial statement and ICFR audits | AS 1201.C6; AS 1201.C7 | Significant risk |
| 6 | Certain Liabilities | The firm used an auditor-employed specialist to assist it with evaluating the reasonableness of a significant assumption used by the issuer to estimate the fair value of a certain liability. To evaluate the reasonableness of the assumption the auditor-employed specialist developed an expectation of the assumption using certain external data. The following deficiency was identified: • The auditor-employed specialist did not perform sufficient procedures to evaluate the relevance of the external data when developing the expectation of the significant assumption. (AS 1105.04 and .06) Both financial statement and ICFR audits | AS 1105.4; AS 1105.6 | Significant risk |
| 7 | Intangible Assets | The firm did not identify and evaluate a departure from the applicable financial reporting framework related to the issuer's omission of certain disclosures related to intangible assets required by the framework. (AS 2810.30 and .31) Both financial statement and ICFR audits | AS 2810.30; AS 2810.31 |
Issuer B3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Goodwill | The issuer evaluated certain goodwill for impairment using a discounted cash flow model which was developed using various assumptions. The firm's approach for substantively testing this goodwill for impairment was to test the issuer's process. The firm did not perform procedures to evaluate the reasonableness of certain significant assumptions used by the issuer to evaluate this goodwill for impairment beyond for certain assumptions comparing the assumptions to the most recent approved budget and prior year impairment tests performing a sensitivity analysis and inquiring of management and for certain other assumptions comparing the assumptions to the most recent approved budget and prior year impairment tests. (AS 2501.16) Financial statement audit only | AS 2501.16 | |
| 2 | Intangible Assets | The firm's substantive procedures to test certain inputs used by the issuer to record intangible assets included the performance of analytical procedures. For certain of these inputs the firm did not (1) determine for one of these inputs whether the expectation used in the analytical procedures was based on predictable relationships and (2) perform procedures to evaluate significant differences between the expected input and actual input used by the issuer beyond inquiry of management. (AS 2305.13 .14 and .21) Financial statement audit only | AS 2305.13; AS 2305.14; AS 2305.21 | |
| 3 | Intangible Assets | The firm did not identify and evaluate a departure from the applicable financial reporting framework related to the issuer's omission of certain disclosures related to intangible assets required by the framework. (AS 2810.30 and .31) Financial statement audit only | AS 2810.30; AS 2810.31 |
Issuer C1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Long-Lived Assets | The principal auditor identified certain long-lived assets as a significant account and the existence and valuation of those assets as relevant assertions. The following deficiency was identified: • The firm did not perform any substantive procedures to test the existence and valuation of these long-lived assets. (AS 2301.08) Both financial statement and ICFR audits | AS 2201.39; AS 2301.8 |