- Inspection year
- 2025
- Report date
- 22-Dec-2025
- PCAOB release
- 104-2026-026
- Audits reviewed
- 3
- Audits w/ Part I.A deficiencies
- 3
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 10
- Part I.B deficiencies
- 2
- Report
- View PDF ↗
Deficiencies (10)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A5 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm did not identify and test any controls over the issuer's evaluation of whether there were any terms and conditions outside of the sales orders that created enforceable rights and obligations which could affect the recognition of revenue pursuant to the FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 2 | Revenue | The firm did not perform sufficient procedures to evaluate whether the issuer recognized revenue in conformity with FASB ASC Topic 606 because it did not evaluate whether there were any terms and conditions outside of the sales orders that created enforceable rights and obligations which could affect the recognition of revenue. (AS 2301.08 and .13) Both financial statement and ICFR audits | AS 2301.8; AS 2301.13 | |
| 3 | Allowance for Doubtful Accounts | The firm selected for testing a control that consisted of the issuer's review of the allowance for doubtful accounts (AFDA) including the review of the AFDA methodology which is determined on a quarterly basis. The firm did not evaluate the specific review procedures that the control owner performed to evaluate the reasonableness of the rates used to determine the AFDA beyond reviewing the control owner's assessment that the rates used were in compliance with the issuer's AFDA methodology. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 4 | Allowance for Doubtful Accounts | The firm's approach for substantively testing the issuer's AFDA was to develop an independent expectation. The firm did not take into account (1) the requirements of an element of FASB ASC Topic 326 Financial Instruments - Credit Losses and (2) its understanding of the issuer's process so that its independent expectation considered the factors relevant to the estimate. Additionally the firm did not perform procedures to demonstrate that it had a reasonable basis for the method and assumptions it used to develop its independent estimate. (AS 2501.21 and .22) Both financial statement and ICFR audits | AS 2501.21; AS 2501.22 | |
| 5 | Related Party Transactions | The firm did not identify and test any controls over the issuer's identification of related parties and relationships and transactions with related parties. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 |
Issuer B3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm did not test or test any controls over the accuracy and completeness of certain data from a report used to substantively test revenue. (AS 1105.10) Financial statement audit only | AS 1105.10 | |
| 2 | Allowance for Doubtful Accounts | With respect to the allowance for doubtful accounts the firm was instructed by the lead auditor to perform certain substantive procedures to test the accounts receivable aging buckets of the component. The firm did not perform any procedures to test the component's accounts receivable aging buckets as instructed by the lead auditor. (AS 2301.08) Financial statement audit only | AS 2301.8 | |
| 3 | Inventory | With respect to certain inventory the firm was instructed by the lead auditor to perform substantive procedures to test the valuation of the inventory including price testing at the stock keeping unit (SKU) level for which the firm was instructed to test every invoice that makes up the SKU category selected for testing. The firm did not test every invoice that made up the selected SKU category as instructed by the lead auditor. (AS 2301.08) Financial statement audit only | AS 2301.8 |
Issuer C2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm did not test or test any controls over the accuracy and completeness of certain data used to substantively test revenue beyond obtaining evidence of payment for selected transactions. (AS 1105.10) Financial statement audit only | AS 1105.10 | |
| 2 | Cash and Cash Equivalents | The firm used an external digital confirmation platform to confirm cash but did not perform procedures to support its reliance on this digital platform's ability to maintain control over the confirmation requests and responses for the year under audit. (AS 2310.28) Financial statement audit only | AS 2310.28 |