- Inspection year
- 2025
- Report date
- 20-Nov-2025
- PCAOB release
- 104-2026-010
- Audits reviewed
- 3
- Audits w/ Part I.A deficiencies
- 3
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 9
- Part I.B deficiencies
- 6
- Report
- View PDF ↗
Deficiencies (9)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A4 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Inventory | The principal auditor instructed the firm to use and evaluate the quality and effectiveness of the work performed by a third party working under the direction of management as evidence regarding the operating effectiveness of a control related to the review of inventory costing for one of the issuer's components. The firm did not identify that the third party did not evaluate and the firm did not perform procedures to 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 2201.44; AS 2605.24 and .26) Both financial statement and ICFR audits | AS 2201.44; AS 2605.24; AS 2605.26 | |
| 2 | Inventory | The principal auditor instructed the firm to test the operating effectiveness of a control related to the review of the reserves for slow-moving and obsolete inventories for three of the issuer's components. 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 2201.44) Both financial statement and ICFR audits | AS 2201.44 | |
| 3 | Inventory | The principal auditor instructed the firm to test the costing of inventory at one of the issuer's components by comparing inventory costs to vendor invoices payroll records labor hours and machine hours. The firm did not perform these substantive procedures. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 | |
| 4 | Allowance for Doubtful Accounts | The principal auditor instructed the firm to use and evaluate the quality and effectiveness of the work performed by a third party working under the direction of management as evidence regarding the operating effectiveness of a control related to the review of the allowance for doubtful accounts for one of the issuer's components. The firm did not identify that the third party did not test and the firm did not perform procedures to test the aspect of the control that addressed the reasonableness of the allowance for doubtful accounts. (AS 2201.44; AS 2605.24 and .26) Both financial statement and ICFR audits | AS 2201.44; AS 2605.24; AS 2605.26 |
Issuer B2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Long-Lived Assets | The firm was instructed by the principal auditor to evaluate the reliability of certain external information used by the issuer in its qualitative assessment of impairment of a certain long-lived asset. The firm was unable to evaluate the reliability of this information. Instead the firm compared the information used by the issuer to other information independently obtained by the firm that it believed was comparable to information used by the issuer. The firm however did not perform any procedures to evaluate the reliability of the information it independently obtained. Further the firm did not perform procedures to evaluate the relevance of this information beyond one consideration. (AS 1105.04 and .06) Financial statement audit only | AS 1105.4; AS 1105.6 | Significant risk |
| 2 | Cash and Cash Equivalents | The firm received a positive confirmation response from a financial institution indicating that one of the cash amounts confirmed was a term deposit with an original maturity greater than three months. The firm did not perform any procedures to evaluate whether the issuer properly presented this amount as cash and cash equivalents in conformity with GAAP. (AS 2301.08) Financial statement audit only | AS 2301.8 |
Issuer C3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm did not perform any procedures to test certain revenue. (AS 2301.08 and .13) Financial statement audit only | AS 2301.8; AS 2301.13 | |
| 2 | Accounts Receivable | To test accounts receivable and certain other revenue the firm sent positive confirmation requests to the issuer's customers. The firm did not perform procedures beyond inquiry to evaluate the nature of exceptions in one returned confirmation. (AS 2310.33) Financial statement audit only | AS 2310.33 | |
| 3 | Cash and Cash Equivalents | The firm received positive confirmation responses from financial institutions indicating that certain of the cash amounts confirmed were term deposits with original maturities greater than three months. The firm did not perform any procedures to evaluate whether the issuer properly presented these amounts as cash and cash equivalents in conformity with GAAP. (AS 2301.08) Financial statement audit only | AS 2301.8 |