1 / 16

Analysis of PCAOB’s 2012 Inspection Report P ricewaterhouse c oopers

Analysis of PCAOB’s 2012 Inspection Report P ricewaterhouse c oopers. Charnele N. Brown Michelle Chalco Julie Chiang Grace Justino Georgette Lewis Irina Navasardian. A glance at P w C. PwC was formed in 1998 Client services PwC serves 26 different industries

kirima
Download Presentation

Analysis of PCAOB’s 2012 Inspection Report P ricewaterhouse c oopers

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Analysis of PCAOB’s 2012 Inspection Report Pricewaterhousecoopers Charnele N. Brown Michelle Chalco Julie Chiang Grace Justino Georgette Lewis Irina Navasardian

  2. A glance at PwC • PwC was formed in 1998 • Client services • PwC serves 26 different industries • Goldman Sachs, American Express, Ford, Walt Disney, and Nike

  3. inspection report Details • The inspection team • Locations where field work was performed: • The Firm’s National Office • 29 of its approximately 66 U.S. practice offices

  4. Finding 1 • PwC did not test accuracy and completeness of acquiree’s historical data used in determining the fair value of a large portion of the acquired intangible assets and  property and equipment.

  5. Finding 1 • GAAP: Full Disclosure Principle and Cost Principle • Accounts, transactions, balances: acquiring intangible assets • Assertions: Completeness and Valuation

  6. Finding 1 • GAAS: AU 328 — Historical Data of Assets • Substantive Testing — Recalculation • Corroboration — Inspection and Confirmation

  7. Finding 2 • The evaluation of the reasonableness of certain assumptions used in determining fair values of acquired assets did not past inquiry of management and the inquiry of issuer’s specialist.

  8. Finding 2 • GAAP: Relevance, reliability, consistency • Accounts, transactions, balances: acquiring assets • Assertions: Valuation

  9. Finding 2 • GAAS: AU 328 — Assumptions of Fair Value • Substantive Testing — Reperformance and Recalculation • Corroboration — Inspection and Confirmation

  10. Finding 3 • Inquiry and comparison of discount rate used in certain acquisitions to the weighted average cost of capital goodwill impairment analysis were the only procedures used evaluate the discount rate.

  11. Finding 3 • GAAP: Accounting for Estimates • Accounts, transactions, balances: Goodwill Impairment • Assertions: Valuation

  12. Finding 3 • GAAS: AU 328 — Discount Rate • Discount Rate — Reperformance • Goodwill Impairment Analysis — Reperformance • Corroboration via auditor-developed model — Recalculation

  13. Finding 4 • For one significant customer process of recognizing majority of revenue was different than other customers: PwC failed to identify and test the controls over occurrence of revenue from the significant customer.

  14. Finding 4 • GAAP: Consistency Principle and Materiality Principle • Accounts, transactions, balances: Revenue • Assertions: Existence, Presentation and Disclosure

  15. Finding 4 • GAAS: AS 5 • Test of Controls — Existence/Occurrence of Revenue • Design Effectiveness • Operating Effectiveness

  16. Closing • 4 Audit Failures • GAAP Violations • GAAS Violations • What did we learn?

More Related