October 23, 2008 Inspection of Moore & Associates, Chartered
Issued by the
Public Company Accounting Oversight Board
October 23, 2008
[...]
A. Review of Audit Engagements
The inspection procedures included a review of aspects of the Firm's auditing of financial statements of five issuers. The scope of this review was determined according to the Board's criteria, and the Firm was not allowed an opportunity to limit or influence the scope.
The inspection team identified what it considered to be audit deficiencies.7/ The deficiencies identified in all five of the audits reviewed included deficiencies of such significance that it appeared to the inspection team that the Firm did not obtain sufficient
competent evidential matter to support its opinion on the issuer's financial statements.8/
Those deficiencies were -
(1) the Firm's failure to identify, or to address appropriately, a departure from GAAP that related to a potentially material misstatement in the audited financial statements concerning the issuance of common stock for services;
(2) the Firm's failure to identify, or to address appropriately, a departure from GAAP that related to a potentially material misstatement in the audited financial statements concerning the classification of the reversal of a previously recorded expense;
(3) inappropriately taking responsibility for the work of another auditor when the other auditor performed substantially all of the audit procedures that served as the basis for the Firm's opinion;
(4) the failure, in two audits, to perform audit procedures to test revenues;
(5) the failure to perform audit procedures concerning deferred offering costs;
(6) the failure to perform audit procedures to test accounts receivable;
(7) the failure to perform audit procedures to test common stock issued for debt;
(8) the failure to perform audit procedures to test selling, general and administrative expenses;
(9) the failure to perform audit procedures to test equipment and deposits on equipment purchases; and
(10) the failure, in five audits, to identify and test related party transactions.
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