The US Public Company Accounting
Oversight Board (PCAOB) has identified deficiencies in two of the
three Ernst & Young (E&Y) Brazil audits it reviewed, an
inspection report has revealed.

The PCAOB said E&Y Brazil did not
obtain sufficient competent evidential matter to support its
opinion on the issuer’s financial statements.

The specific deficiencies included a
failure to perform sufficient procedures to test contracts
purchased to hedge an operating expense and certain cash flows.
Another concern related to E&Y’s evaluation of the issuer’s
accounting for cross-currency and interest rate swap agreements on
debt issuances.

E&Y Brazil said it agreed to
perform additional procedures and improve aspects of its audit
documentation in response to one of the matters identified by the

The PCAOB findings did not change
E&Y’s original audit conclusions or affect the audit opinion on
the financial statements.