Company: DSNY
Filing Date: 2025-11-24
Form Type: 10-K
Source: 0001062993-25-016994
Chunk: 215

Company: DESTINY MEDIA TECHNOLOGIES INC
Filing Date: 2025-11-24
Form: 10-K
Item: Item 6
Chunk 215
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 and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

Capitalization of Payroll Expenses to Intangible Assets

As described in Note 2 to the consolidated financial statements, the Company capitalizes direct costs related to application development activities that are probable to result in additional functionality. Capitalization is limited to costs that are directly attributable to the specific software application development stage. As more fully described in Note 4 to the consolidated financial statements, payroll expenses of $306,052 were capitalized to software under development in intangible assets.

The principal considerations for our determination that capitalization of payroll expenses to intangible assets is a critical audit matter are that there were judgments made by management when assessing whether the payroll expenses incurred for software application activities were eligible for capitalization. This in turn led to a high degree of auditor judgement, subjectivity, and effort in performing procedures to evaluate management's judgements in assessing the accounting for the capitalization of payroll expenses to intangible assets.

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Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statement. Our audit procedures included, among others:

                Discussed, reviewed and obtained support on how management allocates payroll expenses to software under development.
                Discussed with management regarding the plans and intent for the software under