Explorer

The issuer engaged an external pricing service to provide security pricing for its investment securities. The firm used the pricing information from this pricing provider as audit evidence. The firm did not evaluate whether the pricing information provided sufficient appropriate audit evidence because it did not evaluate the relevance and reliability of the pricing information obtained from this pricing provider. (AS 2501.20 .A2 .A4 and .A5)

The firm engaged a specialist to evaluate the fair value hierarchy classifications for the issuer's investment securities. The firm did not perform procedures beyond quantifying the differences in fair value or request that the auditor-engaged specialist perform additional procedures to address the specialist's findings that appeared to contradict the issuer's presentation of these investment securities within the fair value hierarchy. (AS 1210.12; AS 2301.08)

The firm engaged a specialist to evaluate the fair value hierarchy classifications for the issuer's available-for-sale investment securities. The firm did not perform additional procedures beyond consideration of directional risk or request that the auditor-engaged specialist perform additional procedures to address the specialist's findings that appeared to contradict the issuer's presentation of these investment securities within the fair value hierarchy. (AS 1210.12; AS 2301.08)

The issuer recorded the fair values of available-for-sale ('AFS') securities based on the prices it obtained from external pricing services. The firm selected for testing a control that consisted of meetings that the issuer held with the external pricing services to assess the appropriateness of the methods and assumptions used by the external pricing services to price those securities. The firm did not evaluate the specific procedures that the control owner performed to obtain an understanding of the methods and assumptions underlying the prices obtained from the pricing services. (AS 2201.42 and .44)

The issuer recorded most of its AFS securities at fair value based on prices including broker quotes it obtained from external pricing services. The following deficiencies were identified: · The firm did not identify and test any controls over the observability of the pricing inputs related to broker-priced AFS securities at the individual instrument level that the issuer used to determine the categorization of these AFS securities within the fair value hierarchy as set forth in FASB ASC Topic 820. (AS 2201.39)

The issuer reported certain investment securities at fair value and classified them as Level 1 and Level 2 securities in the fair value hierarchy in accordance with IFRS 13 Fair Value Measurement. The firm's approach for substantively testing the classification of these securities was to use an auditor-employed specialist to evaluate the appropriateness of the issuer's methodology for determining the fair value hierarchy levels and develop an independent expectation of the securities that were classified as Level 1. The firm did not sufficiently test the classification of these securities because it did not identify that the auditor-employed specialist did not compare its independent expectation to the securities that the issuer classified as Level 1 and evaluate the differences. (AS 1201.C6 and .C7; AS 2501.26; AS 2810.13)

The issuer reported certain investment securities at fair value and classified them as Level 1 and Level 2 securities in the fair value hierarchy in accordance with IFRS 13 Fair Value Measurement. The firm's approach for substantively testing the classification of these securities was to use an auditor-employed specialist to evaluate the appropriateness of the issuer's methodology for determining the fair value hierarchy levels and develop an independent expectation of the securities that were classified as Level 1. The firm did not perform any procedures to evaluate whether any of the securities classified as Level 2 should have been classified as Level 3. (AS 2301.08)

The issuer engaged an external specialist to estimate the fair value of certain investment securities. The securities had a publicly available quoted price on the last business day prior to year end. The firm did not evaluate the difference between the estimated fair value of the securities determined by the external specialist and the publicly quoted price. (CAS3 500.11; CAS 540.15 and 18)

The issuer recorded the fair values of its available-for-sale securities based on prices it obtained from an external pricing service. The firm selected for testing controls that consisted of the issuer's (1) comparison of these prices to prices obtained from other external pricing services and investigation of price variances that exceeded certain thresholds and (2) review of the categorization of the securities within the fair value hierarchy as set forth in FASB ASC Topic 820 Fair Value Measurement. The firm did not test the aspect of one of these controls that addressed whether all of the issuer's securities were subject to this comparison. (AS 2201.42 and .44)

The issuer recorded the fair values of available-for-sale securities based on the prices it obtained from an external pricing service. The firm selected for testing a control that consisted of the comparison of these prices to prices obtained from another external pricing service. In evaluating the design of this control the firm did not identify that the prices obtained from the other pricing service were derived from the same pricing source as the one the issuer used to record the fair value of the securities. (AS 2201.42)