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The issuer determined the qualitative component of the ALL by applying basis points for qualitative factors to each loan type. The firm's approach for substantively testing the qualitative component was to test the issuer's process. The following deficiency was identified: · The firm did not evaluate the reasonableness of the significant assumptions the issuer used to develop this component. (AS 2501.16)

The issuer's ALL included a qualitative reserve based on various qualitative factors. The following deficiency was identified: · The firm did not perform procedures to evaluate whether the issuer had a reasonable basis for the significant assumptions used to determine the qualitative reserve beyond obtaining and reading an issuer-prepared narrative. (AS 2501.16)

The issuer used certain qualitative factors to determine the qualitative component of the ALL. The firm's approach for substantively testing the qualitative component of the ALL was to test the issuer's process and develop an independent expectation. The following deficiency was identified: · The firm did not evaluate whether the issuer had a reasonable basis for certain significant assumptions related to basis points assigned to qualitative factors used to determine the qualitative component of the ALL. (AS 2501.16)

The issuer used certain qualitative factors to determine the qualitative component of the ALL. The firm's approach for substantively testing the qualitative component of the ALL was to test the issuer's process and develop an independent expectation. The following deficiency was identified: · The firm did not perform any procedures to demonstrate it had a reasonable basis for the assumptions it used in determining its independent expectation. (AS 2501.22)

The issuer reported an ACL that included both a quantitative and qualitative component. The issuer used certain qualitative factors including assigned loan risk grades to determine the qualitative component of the ACL. The following deficiency was identified: · The firm did not perform procedures to evaluate whether the issuer had a reasonable basis for the significant assumptions related to basis points applied to the qualitative factors beyond obtaining and reading an issuer-prepared narrative. (AS 2501.16)

The issuer reported an ACL that included both a quantitative and qualitative component. The issuer used certain qualitative factors including assigned loan risk grades to determine the qualitative component of the ACL. The following deficiency was identified: · The firm did not perform any procedures to evaluate the reasonableness of a significant assumption used to develop the quantitative component. (AS 2501.16)

The firm selected for testing a control that included the issuer's reviews of certain assumptions used to estimate the quantitative component of the ACL. In evaluating the design of this control the firm did not evaluate whether a threshold that the control owner used to identify items for investigation was sufficiently precise to detect material misstatements. (AS 2201.42)

The firm did not perform sufficient substantive procedures to evaluate the reasonableness of certain significant assumptions the issuer used to estimate the ACL because the firm did not evaluate (1) whether the assumptions were consistent with other external factors including economic conditions and (2) the relevance of certain market information the issuer used. (AS 1105.04 and .06; AS 2501.16)

For loans that were collectively evaluated for impairment the issuer determined the qualitative reserve component of the ACL using certain qualitative factors. The firm's approach for substantively testing the qualitative component of the ACL was to test the issuer's process. The following deficiencies were identified: · The firm did not evaluate whether the issuer had a reasonable basis for certain significant assumptions related to the qualitative factors. (AS 2501.16)

The issuer estimated the ACL using various significant assumptions. The firm did not evaluate whether the issuer had a reasonable basis for certain significant assumptions it used. (AS 2501.16)

For loans that the issuer assessed collectively for impairment the issuer estimated the ALL using a model that included loan charge-offs as inputs; these charge-offs were determined based in part on the fair value of the underlying assets. The following deficiencies were identified: · The firm's approach for substantively testing the ALL was to review and test management's process. The firm did not sufficiently evaluate the reasonableness of the ALL because the firm did not test certain information that the issuer used to determine the fair value of the underlying assets. (AS 2501.09 .10 and .11)

The issuer's general reserve of the ALL included a qualitative reserve component that was determined by applying basis points to each of the identified qualitative factors and applying the average of those rates to each loan segment. The firm did not evaluate whether the issuer had a reasonable basis for the significant assumptions related to the basis points and for its selection of assumptions from a range of potential assumptions. (AS 2501.16)

The issuer engaged a specialist to appraise the value of land that collateralized certain of the issuer's loans. The issuer applied adjustments for project percentage of completion and selling cost estimates to the appraised land value to determine the specific reserve to apply to these loans. The firm did not perform procedures to evaluate the reasonableness of the significant assumptions related to the estimates for percentages of completion for the construction projects and selling cost adjustments. (AS 2501.16)

The firm's approach for substantively testing the ALL was to review and test management's process. The firm did not sufficiently evaluate the reasonableness of the ALL because the firm did not perform procedures to test certain factors and assumptions the issuer developed in the prior year and used to determine the ALL in the current year. (AS 2501.09 .10 and .11)

For loans that were collectively evaluated for impairment the issuer estimated the ALL using models and methodologies based on assumptions judgment and other data and applying certain post-model adjustments. The issuer determined post-model adjustments by comparing the model to a benchmark and/or considering data for each loan portfolio. The following deficiencies were identified: - The firm's approach for substantively testing the ALL was to review and test management's process. The firm did not perform procedures to evaluate the reasonableness of the (1) methods and assumptions used by the issuer to determine the benchmarks and (2) assumptions used by the issuer to develop certain post-model adjustments both of which were used by the issuer to determine the ALL. (AS 2501.09 .10 and .11) [This citation refers to AS 2501 Auditing Accounting Estimates which was in effect for this audit. This standard was replaced by AS 2501 Auditing Accounting Estimates Including Fair Value Measurements which became effective for audits of financial statements ending on or after December 15 2020.]

The issuer used an internally developed model to estimate the quantitative component of the ACL for loans collectively evaluated for impairment. The following deficiencies were identified: · The firm's approach for substantively testing the quantitative component of the ACL for loans collectively evaluated for impairment was to test the issuer's process and the firm used an auditor-employed specialist to evaluate the methods and significant assumptions used by the issuer. The firm did not sufficiently evaluate whether the methods used by the issuer were appropriate because the firm did not identify that the auditor-employed specialist did not perform any procedures to test the issuer's model at year end. (AS 1201.C6 and .C7; AS 2501.10)

With respect to the ACL subject to audit procedures: · The firm's approach for substantively testing the ACL was to test the issuer's process. The firm did not perform any procedures to evaluate the reasonableness of certain significant assumptions the issuer used to develop the quantitative component and any significant assumptions the issuer used to develop the qualitative component. (AS 2501.16)

During the year the issuer completed a business combination where the issuer's operations from before the transaction remained on the issuer's existing information systems (“legacy systems”) and continued to be recorded in these systems separately from the other company's operations. The issuer determined the qualitative reserve component of the ACL using qualitative factors and developed one of these factors using various data including appraisal data prepared by the company's specialists and certain external data. The following deficiencies were identified: · The firm's approach for substantively testing the qualitative component of the ACL was to test the issuer's process and the firm used an auditor-employed specialist to evaluate the methods and certain significant assumptions used by the issuer. The firm did not sufficiently evaluate the reasonableness of these significant assumptions because it did not identify that the auditor-employed specialist's procedures were limited to inquiring of management and reading an issuer-prepared memorandum. Further the firm used a sample of appraisal reports prepared by the company's specialists in its testing of these significant assumptions without performing any procedures with respect to its use of the work of the company's specialists as audit evidence. (AS 1105.A1 - .A10 AS 1201.C6 and .C7; AS 2501.16)

The firm's approach for substantively testing the ALL included developing an independent expectation of the ALL which included a specific reserve for impaired loans and a general reserve for loans collectively evaluated for impairment. The firm did not perform any procedures to evaluate the reasonableness of certain assumptions used to develop its independent expectation including assumptions provided by the issuer. (AS 2501.09 .10 and .12) [This citation refers to AS 2501 Auditing Accounting Estimates which was in effect for this audit. This standard was replaced by AS 2501 Auditing Accounting Estimates Including Fair Value Measurements which became effective for audits of financial statements for fiscal years ending on or after December 15 2020.]

With respect to the specific reserve the firm used appraisals prepared in previous years by external specialists engaged by the issuer to evaluate the fair value of properties used as collateral for certain loans the firm evaluated for impairment. Given the length of time that had passed since the appraisals were prepared the firm applied a discount rate to the fair value of each property as part of its evaluation. The firm did not perform procedures to evaluate the relevance and reliability of these appraisals. Specifically the firm did not perform procedures to evaluate the reasonableness of the methods assumptions and underlying data used in preparing the appraisals. Further the firm did not perform any procedures to evaluate the reasonableness of the discount rate used to evaluate these loans for impairment. (AS 2502.26 .28 and .31)

The issuer used various qualitative factors to determine the qualitative component of the ALL. The firm's approach for testing the qualitative reserve was to test the issuer's process. The following deficiencies were identified: · The firm did not perform sufficient procedures to evaluate the reasonableness of the significant assumptions related to the qualitative factors the issuer used to determine the qualitative reserve because it limited its procedures to reading the issuer's ALL methodology and evaluating the consistency of the assumptions with those used in prior periods. (AS 2501.16)

The issuer's ALL also included a specific reserve for impaired loans. The issuer engaged external specialists to determine the fair value of certain property that served as collateral for certain impaired loans. The firm's approach for substantively testing the specific reserve was to develop an independent expectation of the specific reserve that included use of the work of the company's specialists as audit evidence. The following deficiencies were identified: · The firm did not perform procedures to evaluate the reasonableness of another significant assumption that the issuer developed and it used in its independent expectation of the specific reserve. (AS 2501.16)

The issuer's ALL also included a specific reserve for impaired loans. The issuer engaged external specialists to determine the fair value of certain property that served as collateral for certain impaired loans. The firm's approach for substantively testing the specific reserve was to develop an independent expectation of the specific reserve that included use of the work of the company's specialists as audit evidence. The following deficiencies were identified: · The firm did not perform procedures to evaluate the reasonableness of significant assumptions used by the company's specialists to determine the fair value of the properties used as collateral. (AS 1105.A8b; AS 2501.16)

The issuer's ALL also included a specific reserve for impaired loans. The issuer engaged external specialists to determine the fair value of certain property that served as collateral for certain impaired loans. The firm's approach for substantively testing the specific reserve was to develop an independent expectation of the specific reserve that included use of the work of the company's specialists as audit evidence. The following deficiencies were identified: · The firm did not perform sufficient procedures to demonstrate it had a reasonable basis for certain assumptions it developed because it did not demonstrate how its assumptions took into account its understanding of the company's process that included certain information about the properties used as collateral so that its expectations considered the factors relevant to the estimate. (AS 2501.21 and .22)

The issuer's ALL also included a specific reserve for impaired loans. The issuer engaged external specialists to determine the fair value of certain property that served as collateral for certain impaired loans. The firm's approach for substantively testing the specific reserve was to develop an independent expectation of the specific reserve that included use of the work of the company's specialists as audit evidence. The following deficiencies were identified: · The firm did not perform procedures to demonstrate it had a reasonable basis for another assumption it developed and used in its independent expectation of the specific reserve. (AS 2501.22)

For loans collectively evaluated for impairment the firm's approach for substantively testing the ALL was to test the issuer's process. The firm did not evaluate whether the issuer had a reasonable basis for the significant assumptions related to the basis points used for the qualitative factors. (AS 2501.16)

The firm's internal inspection program inspected this audit and reviewed this area but did not identify the deficiencies below. The firm did not evaluate the reasonableness of certain significant assumptions used by the issuer to develop the qualitative component of the allowance for loan losses. (AS 2501.16)

The issuer determined the ALL using qualitative factors and applied basis points in determining each of the qualitative factors. The firm's approach for substantively testing the ALL was to test the issuer's process. The firm did not sufficiently evaluate the reasonableness of significant assumptions related to the basis points because the firm did not evaluate whether the issuer had a reasonable basis for the basis points that were applied to the qualitative factors. (AS 2501.16)

The firm's approach for substantively testing the ALL was to review and test management's process. The firm did not sufficiently evaluate the reasonableness of the basis points that were applied to determine the qualitative component of the ALL because it limited its procedures to (1) reading the issuer's analysis (2) testing the economic and loan portfolio trends and (3) concluding that changes to the basis points applied to determine the qualitative component or lack thereof were reasonable. (AS 2501.09 .10 and .11) [This citation refers to AS 2501 Auditing Accounting Estimates which was in effect for this audit. This standard was replaced by AS 2501 Auditing Accounting Estimates Including Fair Value Measurements which became effective for audits of financial statements ending on or after December 15 2020.]

The issuer developed the qualitative component of the general reserve of the ALL by applying certain qualitative factors to each of its classes of loans. The following deficiencies were identified: · With respect to the firm's substantive procedures to test the qualitative component of the reserve the firm did not evaluate the reasonableness of certain adjustments that the issuer made to the qualitative factors beyond reading the issuer's ALL memorandum and comparing the current year's general reserve to the prior year's. (AS 2501.07)

The firm's approach for substantively testing the reasonableness of certain assumptions the issuer used to estimate the ACL was to review and test the issuer's process. The firm's procedures were limited to comparing these assumptions to those used in the prior year and inquiring of management about significant variances. Further the firm's approach for testing certain other assumptions the issuer used to estimate the ACL was to develop an independent expectation of the assumptions. The firm did not have a reasonable basis for its expectation because it did not evaluate the relevance of the industry information it used in developing its expectation. (AS 1105.04 and .06; 2501.16)

For loans that were collectively evaluated for impairment the issuer determined the qualitative reserve component of the ALL using certain qualitative factors. The following deficiencies were identified: · The firm's approach for substantively testing the ALL was to review and test the issuer's process. The firm did not sufficiently evaluate the reasonableness of the qualitative factors the issuer used to determine the qualitative reserve component of the ALL because the firm's procedures were limited to (1) reading the issuer's ALL memorandum and (2) comparing the qualitative factors the issuer used to those used in prior periods. (AS 2501.16)

For loans that were collectively evaluated for impairment the issuer estimated the qualitative reserve component of the allowance for loan losses (ALL) using qualitative factors. The firm's approach for substantively testing the ALL was to test the issuer's process. The firm did not evaluate whether the issuer had a reasonable basis for a significant assumption the issuer used to develop certain of these qualitative factors. (AS 2501.16)

The issuer's ACL was comprised of various components including quantitative and complementary reserve components and the issuer used various models and assumptions to determine the individual components of the ACL. The firm's approach for substantively testing the ACL was to test the issuer's process. The following deficiency was identified: · The firm did not evaluate whether the method used by the issuer in certain models to determine a complementary reserve component of the ACL was in conformity with the requirements of IFRS. (AS 2501.10)

The issuer's ACL was comprised of various components including quantitative and complementary reserve components and the issuer used various models and assumptions to determine the individual components of the ACL. The firm's approach for substantively testing the ACL was to test the issuer's process. The following deficiency was identified: · The firm did not evaluate the reasonableness of the significant assumptions used by the issuer in these models. (AS 2501.16)

The issuer's ACL was comprised of various components including quantitative and complementary reserve components and the issuer used various models and assumptions to determine the individual components of the ACL. The firm's approach for substantively testing the ACL was to test the issuer's process. The following deficiency was identified: · The firm did not perform procedures to evaluate the reasonableness of certain significant assumptions used by the issuer to determine the quantitative component of the ACL beyond for one such assumption consisting of loan risk ratings testing the mathematical accuracy of certain inputs for a sample of the issuer's risk rating models. (AS 2501.16)

To determine the qualitative reserve component of the ALL for loans that were collectively evaluated for impairment the issuer assigned a loss factor to each loan based on certain qualitative considerations. The following deficiencies were identified: · The firm did not evaluate the reasonableness of the loss factors beyond comparing the factors to those used in the prior year inquiring of management about changes to those factors and the effects on the ALL and recalculating the qualitative reserve component by loan type. (AS 2501.11)

The firm's approach to substantively test the qualitative component of the ALL was to review and test management's process. The firm did not sufficiently evaluate the appropriateness of the issuer's ALL methodology and the reasonableness of the significant inputs and assumptions used because it limited its procedures to comparing the basis-point adjustments for economic and other factors that the issuer used at year end to those used in the prior period. (AS 2501.11)

For loans that were collectively evaluated for impairment the issuer determined the qualitative reserve component of the ALL using certain qualitative factors. The following deficiencies were identified: · The firm's approach for substantively testing the ALL was to review and test management's process. The firm did not sufficiently evaluate the reasonableness of the qualitative reserve component of the ALL because the firm's procedures to test the qualitative factors the issuer used to determine the reserve were limited to (1) reading the issuer's ALL memorandum and (2) comparing the qualitative factors the issuer used at year end to those used in prior periods. (AS 2501.09 .10 and .11)

For loans that were collectively evaluated for impairment the issuer determined the qualitative reserve component of the ALL using certain qualitative factors. The following deficiencies were identified: · The firm's approach for substantively testing the ALL was to review and test management's process. The firm did not sufficiently evaluate the reasonableness of the qualitative reserve component of the ALL because the firm's procedures to test certain qualitative factors the issuer used to determine the reserve were limited to (1) reading the issuer's ALL memorandum and its analysis of the factors and (2) comparing the qualitative factors the issuer used at year end to those used in the prior year. (AS 2501.09 .10 and .11)

The issuer maintained an ALL related to loans receivable which included a collectively assessed component ('Collective Reserve') and an individually assessed component ('Individual Reserve'). The issuer used various models and assumptions to estimate the ALL. The following deficiencies were identified: - The firm's approach for substantively testing the Collective Reserve was to review and test management's process. The firm did not sufficiently evaluate the reasonableness of the Collective Reserve because the firm did not perform procedures to test certain assumptions the issuer used to determine the reserve including the loss rates and portfolio segmentation. (AS 2501.09 .10 and .11) [This citation refers to AS 2501 Auditing Accounting Estimates which was in effect for this audit. This standard was replaced by AS 2501 Auditing Accounting Estimates Including Fair Value Measurements which became effective for audits of financial statements for fiscal years ending on or after December 15 2020.]

The issuer maintained an ALL related to loans receivable which included a collectively assessed component ('Collective Reserve') and an individually assessed component ('Individual Reserve'). The issuer used various models and assumptions to estimate the ALL. The following deficiencies were identified: - The firm did not perform procedures to test the Individual Reserve beyond recalculating the days past due for each loan in the population determining the aging bucket for the respective loans and re-performing the issuer's calculation of the reserve using the issuer's loan risk level and associated loss rate assumptions. (AS 2501.07) [This citation refers to AS 2501 Auditing Accounting Estimates which was in effect for this audit. This standard was replaced by AS 2501 Auditing Accounting Estimates Including Fair Value Measurements which became effective for audits of financial statements for fiscal years ending on or after December 15 2020.]

The issuer's ALL included a reserve for loans individually evaluated for impairment ('specific reserve') and a reserve for loans collectively evaluated for impairment ('collective reserve'). The issuer's collective reserve included a component that was determined by using certain qualitative factors ('qualitative component'). The following deficiencies were identified: · The firm's approach for substantively testing the collective reserve was to review and test management's process. The firm did not perform procedures to evaluate the reasonableness of the basis points that were applied to determine the qualitative component beyond comparing these basis points to the basis points that were applied in prior years and assessing whether certain changes or lack thereof to the basis points from the prior year were directionally consistent with internal or external data and performing procedures to test certain data. (AS 2501.09 .10 and .11) [This citation refers to AS 2501 Auditing Accounting Estimates which was in effect for this audit. This standard was replaced by AS 2501 Auditing Accounting Estimates Including Fair Value Measurements which became effective for audits of financial statements for fiscal years ending on or after December 15 2020.]

The firm's internal inspection program had inspected this audit and reviewed this area but did not identify the deficiencies below. To determine the qualitative component of the ACL the issuer identified one or more data inputs relevant to each identified qualitative factor and established quantitative ranges for these inputs corresponding with the risk level expected to be assigned to each factor and loan pool. The firm did not perform sufficient procedures to evaluate the reasonableness of the significant assumptions related to the assessed risk levels and related basis points applied to the collateral factor reserves. (AS 2501.16)

The issuer's ALL included a qualitative component. The firm's approach for substantively testing the ALL was to review and test management's process. The firm did not sufficiently evaluate the reasonableness of the qualitative component of the ALL because the firm's procedures to test certain assumptions the issuer used to determine the qualitative component were limited to comparing these assumptions to prior periods inquiring about changes and recalculating the allowance. (AS 2501.09 .10 and .11)

The issuer's ALL consisted of a qualitative component and an unallocated reserve component. The firm's approach for substantively testing the ALL was to both test the issuer's process and develop an independent expectation of the estimate. The following deficiencies were identified: · The firm did not evaluate whether the issuer had a reasonable basis for the significant assumptions it used to develop the qualitative component. (AS 2501.16)

The issuer's ALL consisted of a qualitative component and an unallocated reserve component. The firm's approach for substantively testing the ALL was to both test the issuer's process and develop an independent expectation of the estimate. The following deficiencies were identified: · The firm did not evaluate the reasonableness of the significant assumptions the issuer used to develop the unallocated reserve component. (AS 2501.16)

The issuer's ALL consisted of a qualitative component and an unallocated reserve component. The firm's approach for substantively testing the ALL was to both test the issuer's process and develop an independent expectation of the estimate. The following deficiencies were identified: · The firm did not perform procedures to demonstrate it had a reasonable basis for certain assumptions it used to develop its independent expectation. (AS 2501.22)

The firm did not perform procedures to evaluate the reasonableness of the qualitative factors and loan grade basis points used by the issuer to determine the ALL beyond comparing the current period qualitative factors and loan grade basis points to those used in prior periods. (AS 2501.07)

The issuer's ALL included a general reserve and a specific reserve for loans that are individually evaluated for impairment. The firm did not sufficiently test the reasonableness of the general reserve because it limited its procedures to reading an issuer-prepared memo and testing the mathematical accuracy of the reserve calculation. (AS 2501.07)