How audits fail in Significant Estimates
The recurring ways firms fell short. Click any one to read the real inspection findings.
- Estimate assumptions not evaluated18
The firm didn't sufficiently evaluate the reasonableness of the significant assumptions behind an estimate.
2 significant risk - Management review controls not fully evaluated13
The firm tested a management review control but didn't evaluate the specific procedures the reviewer performed, or the control's precision.
6 significant risk - Accuracy/completeness of client data not tested11
The firm used issuer-prepared schedules, reports, or system data without testing that they were accurate and complete.
3 significant risk - Controls not identified or tested11
The firm didn't identify and/or test controls it needed to rely on for the account or assertion.
4 significant risk - Little or no substantive testing7
The firm performed little or no substantive testing over the account, disclosure, or assertion.
3 significant risk - Sample too small or unsupported4
The sample the firm tested was too small, or the basis for the sample size didn't support the conclusion.
1 significant risk - Confirmations / alternative procedures1
The firm didn't obtain confirmations, or didn't perform sufficient alternative procedures when confirmations weren't returned.
1 significant risk - Risk assessment1
The firm didn't properly identify, assess, or revise its risks of material misstatement.