On December 22, 2022, the PCAOB issued a settled order sanctioning a now-retired EY Canada audit partner for allegedly failing to adequately evaluate a significant estimate in connection with the 2019 audit of Just Energy Group Inc., a Canadian energy company.  The Company subsequently restated its financial statements to increase losses, primarily as a result of an increase in its estimate for doubtful accounts (also referred to as a receivables allowance). According to the PCAOB, the engagement partner identified the receivables allowance as a significant accounting estimate, but failed to adequately evaluate the reasonableness of the allowance, despite evidence that receivables past due by more than 120 days exceeded the allowance by $14 million.  Specifically, the partner allegedly did not: (1) sufficiently test management’s assertion that the company’s more current collection experience was consistent with the write-off rates from older historical periods used to develop the estimate; (2) adequately test the completeness and accuracy of the historical write-off data provided by the company; and (3) adequately obtain and evaluate sufficient appropriate audit evidence supporting key assumptions in developing an independent expectation of the estimate.  The PCAOB also alleged that the audit partner failed to adequately test and evaluate deficiencies in the company’s controls over the receivables allowance estimation and write-off process and failed to communicate to the audit committee both the significant assumptions used in the management’s receivables allowance estimate and the basis for the firm’s conclusion regarding the reasonableness of the receivables allowance.  The engagement partner agreed to settle the matter without admitting or denying the PCAOB’s allegations.  The PCAOB censured the engagement partner, barred him from associating with a PCAOB-registered firm (with a right to reapply after one year), and imposed a $65,000 civil monetary penalty.  The matter is In the Matter of Martin Lundie, CPA.  A copy of the PCAOB order is attached.