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The issuer assigned a risk rating to each of its commercial loans. The loan risk rating was an important input in estimating the ACL for commercial loans collectively assessed for impairment. The firm selected for testing a control that consisted of the issuer's review for a sample of loans of the loan risk ratings assigned to certain commercial loans. The firm did not identify and test any controls over the accuracy and completeness of certain loan information that the control owners used to select loans for review. (AS 2201.39)

With respect to the allowance for loan losses (ALL) at one of the issuer's subsidiaries: The firm used this spreadsheet in its substantive testing of the ALL but did not perform any procedures to test or test any controls over the completeness of this spreadsheet. (AS 1105.10)

The issuer's general reserve component of the ALL included a qualitative reserve component that was determined by certain qualitative factors. The firm selected for testing a control that included the review of the qualitative component of the general reserve. The firm did not evaluate the review procedures that the control owner performed including the procedures to identify items for follow up and the procedures to determine whether those items were appropriately resolved. (AS 2201.42 and .44)

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 basis points that were applied to qualitative factors beyond (1) reading the issuer's analysis (2) comparing the basis points that were applied to the qualitative factors to the basis points that were applied in the prior year and (3) assessing whether certain changes or lack thereof to the basis points from prior year were directionally consistent with internal or external data. (AS 2501.09 .10 and .11)

The issuer's general reserve component of the ALL included a qualitative reserve component that was determined by certain qualitative factors. The firm selected for testing a control that included the review of the qualitative component of the general reserve. The firm did not evaluate the review procedures that the control owner performed with respect to certain qualitative factors including the procedures to identify items for follow up and the procedures to determine whether those items were appropriately resolved. (AS 2201.42 and .44)

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 basis points that were applied to certain qualitative factors beyond (1) reading the issuer's analysis (2) comparing the basis points that were applied to the qualitative factors to the basis points that were applied in the prior year and (3) assessing whether certain changes or lack thereof to the basis points from the prior year were directionally consistent with internal or external data. (AS 2501.09 .10 and .11)

The issuer's general reserve component of the ALL included a qualitative reserve component that was determined by certain qualitative factors. The firm selected for testing a control that included the review of the qualitative component of the general reserve. The firm did not evaluate the review procedures that the control owner performed including the procedures to identify items for follow up and the procedures to determine whether those items were appropriately resolved. (AS 2201.42 and .44)

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 basis points that were applied to qualitative factors beyond (1) reading the issuer's analysis (2) comparing the basis points that were applied to the qualitative factors to the basis points that were applied in the prior year and performing a trend analysis and (3) assessing whether certain changes or lack thereof to the basis points from the prior year and the results from the resulting from the comparison and trend analysis were directionally consistent with internal or external data. (AS 2501.09 .10 and .11)

The issuer used service organizations to host and/or maintain and manage various information technology (IT) systems that the issuer used to initiate process and record transactions related to the ALL and Investment Securities. The following deficiencies were identified: · The firm did not perform procedures beyond inquiring of management and reading certain related documentation to test that controls over program changes access to programs and computer operations were designed and operating effectively. (AS 2201.42 and .44)

The firm's approach for substantively testing the quantitative component of the ALL was (1) to review and test management's process and (2) develop an independent expectation. The issuer used loss data from selected peer companies to develop loss rates that it used to estimate the quantitative component of the portion of the ALL related to loans collectively evaluated for impairment. The following deficiencies were identified: · To develop an independent expectation the firm used a combination of the issuer's historical loss rates and the loss rates of the group of peer companies used by the issuer to develop estimated loss ranges and compared these estimated loss ranges to the issuer's loss rates. The firm did not evaluate (1) the reasonableness of the assumptions used to develop these estimated loss ranges and (2) the differences between these estimated loss ranges and issuer's loss rates. (AS 2501.09 .10 and .12)

The firm's approach for substantively testing the qualitative component of 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 component were limited to (1) reading the issuer's ALL memorandum (2) testing certain observable inputs related to existing economic conditions that the issuer used to develop its loss estimates and (3) comparing the qualitative factors the issuer used at year end to those used in prior periods. (AS 2501.09 .10 and .11)

The firm did not perform any substantive procedures to test or in the alternative test any controls over the accuracy and/or completeness of certain data and reports the firm used in its substantive testing of the ALL. (AS 1105.10)

The issuer used service organizations to host and/or maintain and manage various information technology (IT) systems that the issuer used to initiate process and record transactions related to the ALL and Investment Securities. The following deficiencies were identified: · The firm did not perform any procedures to evaluate whether the appropriate complementary user entity controls were implemented and operating effectively in order to achieve the control objectives stated in the service organizations' control reports. (AS 2201.B22)

Loan risk ratings were an important input in estimating the issuer's ALL. The firm selected for testing a control designed to validate loan risk ratings assigned by the issuer to certain categories of its loans. The issuer used internal loan reviewers (ILRs) and an external loan reviewer (ELR) in the operation of this control. The following deficiencies were identified: · The firm did not evaluate the review procedures that the ILRs performed including the procedures to identify items for follow up and the procedures to determine whether those items were appropriately resolved. (AS 2201.42 and .44)

Loan risk ratings were an important input in estimating the issuer's ALL. The firm selected for testing a control designed to validate loan risk ratings assigned by the issuer to certain categories of its loans. The issuer used internal loan reviewers (ILRs) and an external loan reviewer (ELR) in the operation of this control. The following deficiencies were identified: · The ELR reviewed loan risk ratings at an interim date. The firm did not identify and test any controls over the loans that were subject to review by the ELR from the interim date to the issuer's year end. (AS 2201.39)

Loan risk ratings were an important input in estimating the issuer's ALL. The firm selected for testing a control designed to validate loan risk ratings assigned by the issuer to certain categories of its loans. The issuer used internal loan reviewers (ILRs) and an external loan reviewer (ELR) in the operation of this control. The following deficiencies were identified: · The firm did not identify and test any controls over the reasonableness of loan risk ratings for loans that were not subject to this control. (AS 2201.39)

Loan risk ratings were an important input in estimating the issuer's ALL. The firm selected for testing a control designed to validate loan risk ratings assigned by the issuer to certain categories of its loans. The issuer used internal loan reviewers (ILRs) and an external loan reviewer (ELR) in the operation of this control. The following deficiencies were identified: · The firm did not identify and test any controls over the accuracy and completeness of data the ILRs and ELR used in the performance of this control. (AS 2201.39)

The firm identified deficiencies in certain of the issuer's other controls over the ALL it had selected for testing and concluded that these deficiencies in the aggregate represented a significant deficiency. The firm did not sufficiently evaluate whether the identified control deficiencies represented a material weakness because the firm did not evaluate the magnitude of the potential misstatements resulting from these control deficiencies. (AS 2201.62)

The firm's approach for substantively testing the quantitative component of the ALL was (1) to review and test management's process and (2) develop an independent expectation. The issuer used loss data from selected peer companies to develop loss rates that it used to estimate the quantitative component of the portion of the ALL related to loans collectively evaluated for impairment. The following deficiencies were identified: · The firm did not obtain an understanding of how the issuer developed its loss rates. (AS 2501.10)

The firm's approach for substantively testing the quantitative component of the ALL was (1) to review and test management's process and (2) develop an independent expectation. The issuer used loss data from selected peer companies to develop loss rates that it used to estimate the quantitative component of the portion of the ALL related to loans collectively evaluated for impairment. The following deficiencies were identified: · To test management's process the firm compared the loss rates developed by the issuer to the loss rates of certain peer companies identified by the issuer. The firm did not sufficiently evaluate the relevance of the loss rates of the peer companies because the firm did not evaluate the comparability of the composition and risk characteristics of the issuer's loan portfolio to the loan portfolios of the peer companies. (AS 2501.09 .10 and .11)

The issuer used certain qualitative factors to determine the qualitative component of the ALL. The firm selected for testing a review control over certain data used in the calculation of the qualitative reserve. The firm did not evaluate the review procedures that the control owners performed including the procedures to identify items for follow up and the procedures to determine whether those items were appropriately resolved. (AS 2201.42 and .44)

The issuer also reported a component of the ALL related to loans individually evaluated for impairment of which certain loans were considered collateral dependent and the impairment was determined based on the fair value of the collateral less estimated costs to sell. The issuer engaged a specialist to determine the fair value of certain collateral and for the remaining collateral the issuer used an automated valuation model to determine the fair value. The following deficiencies were identified: · The firm did not perform sufficient procedures to test the fair value of collateral based on the company's specialists' valuation reports that it selected for testing because it did not perform further procedures to use the work of the company's specialist as audit evidence. (AS 1105.A1 - .A10; AS 2501.07)

The issuer also reported a component of the ALL related to loans individually evaluated for impairment of which certain loans were considered collateral dependent and the impairment was determined based on the fair value of the collateral less estimated costs to sell. The issuer engaged a specialist to determine the fair value of certain collateral and for the remaining collateral the issuer used an automated valuation model to determine the fair value. The following deficiencies were identified: · The firm's approach to test the fair value of the collateral based on the issuer's internal model it selected for testing was to develop an independent expectation. The firm did not perform any procedures to demonstrate it had a reasonable basis for the assumptions used (AS 2501.22)

The issuer also reported a component of the ALL related to loans individually evaluated for impairment of which certain loans were considered collateral dependent and the impairment was determined based on the fair value of the collateral less estimated costs to sell. The issuer engaged a specialist to determine the fair value of certain collateral and for the remaining collateral the issuer used an automated valuation model to determine the fair value. The following deficiencies were identified: · The firm's approach to test the fair value of the collateral based on the issuer's internal model it selected for testing was to develop an independent expectation. The firm did not perform any procedures to evaluate the relevance and reliability of certain information it obtained from an external source that it used to develop its independent expectation. (AS 1105.04 and .06)

Loan risk grades were an important input in estimating the issuer's ALL. The firm selected for testing a control designed to validate loan risk grades assigned by the issuer to certain categories of loans. The control included the review of loan risk grades by the issuer's external loan reviewer (ELR). The following deficiencies were identified: · The firm did not evaluate the review procedures that the control owners performed to evaluate the appropriateness of the issuer's loan grades. (AS 2201.42 and .44)

Loan risk grades were an important input in estimating the issuer's ALL. The firm selected for testing a control designed to validate loan risk grades assigned by the issuer to certain categories of loans. The control included the review of loan risk grades by the issuer's external loan reviewer (ELR). The following deficiencies were identified: · The ELR reviewed loan risk grades as of an interim date. The firm did not identify and test any controls over the loans that were subject to review by the ELR from the interim date to the issuer's year end. (AS 2201.39)

Loan risk grades were an important input in estimating the issuer's ALL. The firm selected for testing a control designed to validate loan risk grades assigned by the issuer to certain categories of loans. The control included the review of loan risk grades by the issuer's external loan reviewer (ELR). The following deficiencies were identified: · The firm did not identify and test any controls over the reasonableness of loan risk grades for loans that were not subject to this control. (AS 2201.39)

On a periodic basis the issuer evaluates potential problem loans. The firm selected for testing a control that included the review of potential problem loans. The following deficiencies were identified: · The firm did not evaluate the review procedures that the control owners performed including the procedures to identify items for follow up and the procedures to determine whether those items were appropriately resolved. (AS 2201.42 and .44)

On a periodic basis the issuer evaluates potential problem loans. The firm selected for testing a control that included the review of potential problem loans. The following deficiencies were identified: · The firm did not identify and test any controls over the accuracy and completeness of reports used by the control owners. (AS 2201.39)

The issuer's ALL included loans individually evaluated for impairment. The firm did not identify and test any controls over the reasonableness of the fair value of the collateral used in the loan impairment calculation for certain individually evaluated loans. (AS 2201.39)

The firm's approach for substantively testing the qualitative component of the ALL was to review and test the issuer's process. The firm did not perform procedures to evaluate whether the issuer had a reasonable basis for the significant assumptions related to basis point qualitative factors used to determine the qualitative component of the ALL beyond obtaining and reading an issuer-prepared narrative. (AS 2501.16)

The issuer also reported a component of the ALL related to loans individually evaluated for impairment of which certain loans were considered collateral dependent and the impairment was determined based on the fair value of the collateral less estimated costs to sell. The issuer engaged a specialist to determine the fair value of certain collateral and for the remaining collateral the issuer used an automated valuation model to determine the fair value. The following deficiencies were identified: · The firm did not perform sufficient procedures to test the fair value of collateral based on the company's specialists' valuation reports that it selected for testing because although it determined it needed additional evidence for valuation reports that were significantly aged it limited its procedures to inquiry and obtaining information from external sources without evaluating the relevance and reliability of that information. (AS 1105.04 .06 and .A10; AS 2501.07)

The issuer developed the ACL for loans collectively evaluated for impairment using various models that were maintained by a service organization. The firm obtained a service auditor's report for this service organization. The following deficiency was identified: • The firm did not identify and test any controls over the appropriateness of certain models that were not addressed by this service auditor's report. (AS 2201.39)

The firm's approach for substantively testing the ACL was to test the issuer's process and the firm used the work of company specialists to evaluate the appropriateness of certain of the models the issuer used to develop the ACL for loans collectively evaluated for impairment. The following deficiency was identified: • The firm did not perform procedures to evaluate the reasonableness of the significant assumptions used to develop the ACL beyond reading an issuer-prepared memorandum. (AS 2501.16)

The firm's approach for substantively testing the ACL was to test the issuer's process and the firm used the work of company specialists to evaluate the appropriateness of certain of the models the issuer used to develop the ACL for loans collectively evaluated for impairment. The following deficiency was identified: • The firm used issuer-prepared loan delinquency data in its substantive testing of the ACL but did not perform procedures to test or test any controls over the accuracy of this data. (AS 1105.10)

The issuer developed the ACL for loans collectively evaluated for impairment using various models that were maintained by a service organization. The firm obtained a service auditor's report for this service organization. The following deficiency was identified: • The firm identified certain complementary user controls related to the issuer's validation and review of the outputs of the service organization's models that the service auditor's report described as necessary. The firm selected for testing a control to address the complementary user controls but did not identify that this control was not designed to satisfy the control objectives of the complementary user controls. (AS 2201.42 and .B22)

The issuer developed the ACL for loans collectively evaluated for impairment using various models that were maintained by a service organization. The firm obtained a service auditor's report for this service organization. The following deficiency was identified: • The firm selected for testing a control that consisted of the issuer's review of the ACL. The firm did not identify and test any controls over the accuracy and completeness of a report produced by the service organization that was used in the operation of this control. (AS 2201.39)

The issuer developed the ACL for loans collectively evaluated for impairment using various models that were maintained by a service organization. The firm obtained a service auditor's report for this service organization. The following deficiency was identified: • The firm selected for testing a control that included the issuer's review of certain ACL assumptions that the service organization used in its models. The firm did not perform procedures to evaluate the specific review procedures that the control owners performed to assess the reasonableness of these assumptions. (AS 2201.42 and .44)

The issuer developed the ACL for loans collectively evaluated for impairment using various models that were maintained by a service organization. The firm obtained a service auditor's report for this service organization. The following deficiency was identified: • The firm selected for testing a control that included the issuer's review of certain ACL assumptions that the service organization used in its models. The firm did not identify and test any controls over the review of an analysis that was prepared by a company specialist and used in the operation of this control. (AS 2201.39)

The firm selected for testing certain controls over the review of changes to risk ratings credit quality monitoring collateral impairment analysis and loan write-offs. The firm did not perform procedures to evaluate the review procedures that the control owner performed including the procedures to identify items for follow up and the procedures to determine whether those items were appropriately resolved. (AS 2201.42 and .44)

The firm did not identify and test any or test aspects of controls over the accuracy and/or completeness of the loan delinquency data and certain other loan data that the issuer used in the operation of controls over the ACL the firm selected for testing. (AS 2201.39)

The firm's approach for substantively testing the ACL was to test the issuer's process and the firm used the work of company specialists to evaluate the appropriateness of certain of the models the issuer used to develop the ACL for loans collectively evaluated for impairment. The following deficiency was identified: • The firm used a report produced by the service organization in its substantive testing of the ACL but did not perform procedures to test or test any controls over the accuracy of this report. (AS 2301.08 and .11)

The firm's approach for substantively testing the ACL was to test the issuer's process and the firm used the work of company specialists to evaluate the appropriateness of certain of the models the issuer used to develop the ACL for loans collectively evaluated for impairment. The following deficiency was identified: • The firm did not perform procedures to evaluate whether certain of the models the issuer used were in conformity with the requirements of GAAP and appropriate for the nature of the ACL beyond reading the company's specialist's report. Further the firm did not perform any procedures with respect to its use of the work of the company's specialist as audit evidence. (AS 1105.A1 - A.10; AS 2501.10)

The firm selected for testing a control that consisted of the issuer's review of certain loans based on risk indicators including an identification of problem loans which operated during the first seven months of the year. The firm did not evaluate the review procedures that the control owner performed including the procedures to identify items for follow up and the procedures to determine whether those items were appropriately resolved. (AS 2201.42 and .44)

The firm selected for testing a control that consisted of the issuer's review of certain loans based on risk indicators including an identification of problem loans which operated during the first seven months of the year. The firm did not identify and test any controls over the issuer's review of loans for the last five months of the year. (AS 2201.39)

The firm's approach for substantively testing the ALL was to review and test management's process. The firm did not perform sufficient procedures to evaluate the reasonableness of the ALL because the firm did not perform procedures to test certain factors and assumptions used by the issuer to determine the qualitative component of the ALL. (AS 2501.09 .10 and .11)

The issuer's general reserve component of the ALL included a qualitative reserve that included two components based on qualitative adjustments. The firm's approach for substantively testing the ALL was to test the issuer's process. The firm did not perform sufficient procedures to evaluate the reasonableness of the basis points applied to qualitative factors used by the issuer to determine one of the qualitative adjustments because the firm did not evaluate whether the issuer had a reasonable basis for the basis points used. (AS 2501.16)

The issuer's general reserve component of the ALL included a qualitative reserve that included two components based on qualitative adjustments. The firm's approach for substantively testing the ALL was to test the issuer's process. The firm did not perform sufficient procedures to test the other qualitative adjustment because the firm did not evaluate the reasonableness of a significant assumption used in the calculation. (AS 2501.16)

The issuer's general reserve component of the ALL included a qualitative reserve that included two components based on qualitative adjustments. The firm's approach for substantively testing the ALL was to test the issuer's process. The firm did not evaluate the relevance of certain external data the issuer used to determine the adjustment. (AS 1105.04 and .06)

The issuer's general reserve component of the ALL included a qualitative reserve that included two components based on qualitative adjustments. The firm's approach for substantively testing the ALL was to test the issuer's process. The firm did not perform any substantive procedures to test or in the alternative test any controls over the accuracy and completeness of certain internal data used in the calculation. (AS 1105.10)