Explorer

The issuer held certain non-marketable equity investments that were recorded at adjusted cost. For one of these investments the firm did not perform sufficient procedures to evaluate the issuer's conclusion that the investment was not impaired because the firm did not (1) test the issuer's qualitative assessment and (2) test the fair value of the issuer's sale of this investment through a non-monetary transaction subsequent to year end which the issuer used to support its conclusion that the investment was not impaired at year end. (AS 2501.07)

For another of these investments the issuer concluded that the investment was not impaired based in part on a private placement transaction earlier in the year. The firm did not perform sufficient procedures to evaluate the issuer's conclusions that the investment was not impaired because the firm did not (1) test the issuer's qualitative assessment; (2) evaluate whether impairment indicators existed because the investee company reported a net loss for the year and its total liabilities exceeded its total assets; and (3) evaluate the value of the investee's shares at year end relative to the private placement transaction earlier in the year. (AS 2301.08)

The issuer also held an investment in an entity for which it had a majority ownership but the entity was not consolidated due to certain qualitative considerations. The firm did not evaluate these qualitative considerations in assessing whether the issuer's accounting was in conformity with FASB ASC Topic 323 Investments — Equity Method and Joint Ventures. (AS 2810.30)

The issuer also held an investment in an entity for which it had a majority ownership but the entity was not consolidated due to certain qualitative considerations. The issuer identified impairment indicators related to this investment and engaged an external specialist to estimate its fair value. The firm did not test the data used by the external specialist to determine the fair value. (AS 1210.12)

The issuer also held an investment in an entity for which it had a majority ownership but the entity was not consolidated due to certain qualitative considerations. The firm did not evaluate the reasonableness of the assumptions used by the external specialist to estimate the fair value. (AS 2502.26 and .28)

The issuer reported an equity-method investment in an investee whose fiscal year end was six months earlier than the issuer's. The firm did not test any transactions or the investee's financial information for the six-month period between the investee's and the issuer's fiscal year ends. (AS 2503.28)

The issuer reported an equity-method investment in an investee whose fiscal year end was six months earlier than the issuer's. The firm did not test the percentage of ownership in the investee at year end. (AS 2301.08)

The firm did not perform any substantive procedures to test an investment. (AS 2301.08)

The firm did not perform any procedures to test certain investments. (AS 2301.08)

The issuer recorded the fair value of available-for-sale ('AFS') securities based on the prices it obtained from an external pricing service. The firm selected for testing a quarterly control that consisted of the issuer's comparing for one-fourth of its AFS securities these prices to prices it obtained from another external pricing service. The firm did not evaluate whether the control was appropriately designed to consider whether there were changes to the risk of material misstatement inherent in the population of securities from the issuer's interim testing dates to the issuer's year end. (AS 2201.42)

The firm selected for testing controls that consisted of the issuer's reviews of the fair value of certain investments. The firm did not evaluate the specific review procedures that the control owners performed to assess the (1) reasonableness of the methodologies and assumptions the issuer used to determine the fair value of these investments and (2) accuracy and completeness of a report used in the operation of these controls. (AS 2201.42 and .44)

The issuer held investments without readily determinable fair values that were recorded at cost less impairments. The following deficiencies were identified: · For one of these investments selected for testing the firm did not perform sufficient procedures to evaluate whether management considered certain relevant information in determining whether factors may have existed that indicated an impairment loss was present because the firm's procedures were limited to reading certain meeting minutes and related documents which did not address the relevant information. (AS 2503.48)

The issuer held investments without readily determinable fair values that were recorded at cost less impairments. The following deficiencies were identified: · For another of these investments selected for testing the issuer identified factors that may have indicated an impairment loss was present but concluded that the investment was not impaired based on a sensitivity analysis it prepared for certain of these factors. The firm did not perform any procedures to test this sensitivity analysis and evaluate the other potential impairment factors that were identified by the issuer. (AS 2503.48)

The firm used an auditor-engaged specialist to assist it with evaluating the appropriateness of the issuer's categorization of investments within the fair value hierarchy set forth in FASB ASC Topic 820. The firm identified a difference between the categorization determined by the issuer and determined by the auditor-engaged specialist but did not perform any procedures to evaluate this difference. (AS 2301.08)

The issuer used various service organizations for the custody recordkeeping and processing of certain investment transactions and these service organizations used sub-service organizations for certain functions. The firm obtained the service auditor's reports for each of these service organizations and identified certain complementary user controls that the service auditor's reports described as necessary. The following deficiencies were identified: · The firm selected for testing a control that addressed the issuer's review of certain investments for potential impairment. The firm did not evaluate whether the control was designed to consider all of the relevant requirements of FASB ASC Topic 326 Current Expected Credit Losses when assessing whether an impairment loss or credit impairment existed for these investments. (AS 2201.42 and .B22)

The issuer used various service organizations for the custody recordkeeping and processing of certain investment transactions and these service organizations used sub-service organizations for certain functions. The firm obtained the service auditor's reports for each of these service organizations and identified certain complementary user controls that the service auditor's reports described as necessary. The following deficiencies were identified: · The firm selected for testing a control that addressed the issuer's review of certain investments for potential impairment. The firm did not evaluate whether the control was designed to consider all of the relevant requirements of FASB ASC Topic 326 Current Expected Credit Losses when assessing whether an impairment loss or credit impairment existed for these investments. (AS 2201.42 and .B22)

The issuer used various service organizations for the custody recordkeeping and processing of certain investment transactions and these service organizations used sub-service organizations for certain functions. The firm obtained the service auditor's reports for each of these service organizations and identified certain complementary user controls that the service auditor's reports described as necessary. The following deficiencies were identified: · The firm selected for testing a control over the review of monthly investment reconciliations. The firm did not identify and test any controls over the accuracy and completeness of certain reports used in the operation of this control. (AS 2201.39)

The issuer used various service organizations for the custody recordkeeping and processing of certain investment transactions and these service organizations used sub-service organizations for certain functions. The firm obtained the service auditor's reports for each of these service organizations and identified certain complementary user controls that the service auditor's reports described as necessary. The following deficiencies were identified: · The firm did not obtain an understanding of or test any relevant controls at certain sub-service organizations. (AS 2201.39 and .B19)

The issuer used various service organizations for the custody recordkeeping and processing of certain investment transactions and these service organizations used sub-service organizations for certain functions. The firm obtained the service auditor's reports for each of these service organizations and identified certain complementary user controls that the service auditor's reports described as necessary. The following deficiencies were identified: · For one sub-service organization the firm did not perform any procedures to evaluate whether there were any changes in the sub-service organization's controls from the date of the service auditor's report to year end given the length of period under audit not covered by the service auditor's report. (AS 2201.B24 and .B25)

The sample size the firm used in certain of its substantive procedures to test these investments was too small to provide sufficient appropriate audit evidence because these procedures were designed based on a level of control reliance that was not supported due to deficiencies in the firm's control testing discussed above. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A)

The firm did not perform sufficient procedures to evaluate the issuer's conclusion that no impairment or credit loss existed for certain investments because it did not take into account certain relevant requirements of FASB ASC Topic 326. (AS 2301.08)

The firm used an auditor-engaged specialist to assist it with evaluating the appropriateness of the issuer's categorization of investments within the fair value hierarchy set forth in FASB ASC Topic 820 Fair Value Measurement. The firm identified certain differences between the categorizations determined by the issuer and those determined by the auditor-engaged specialist but did not perform any procedures to evaluate these differences. (AS 2301.08)

The issuer recorded the fair value of certain of its available-for-sale (AFS) securities based on prices it obtained from an external pricing service. The firm selected for testing a control that consisted of the issuer's comparison of its recorded prices to prices obtained from another external pricing service and the issuer's investigation of price variances that exceeded certain thresholds. The firm did not evaluate the specific review procedures that the control owner performed to (1) assess whether the prices the issuer used in this comparison were derived from independent sources and (2) investigate identified variances and determine whether items identified for follow up had been appropriately resolved. (AS 2201.42 and .44)

The firm selected for testing a control that consisted of the issuer's review of certain AFS securities for potential impairment. The firm did not identify and test any controls over the accuracy and completeness of certain information used in the operation of this control. (AS 2201.39)

The firm's approach for substantively testing the fair values of certain of the issuer's held-to-maturity securities 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 test the fair value of these investments because it did not identify that the auditor-employed specialist did not perform procedures to evaluate whether the issuer had a reasonable basis for certain significant assumptions it used. (AS 1201.C6 and .C7; AS 2501.16)

The firm's approach to substantively test the fair value of certain investments was to develop independent expectations of the fair values using the work of an auditor-employed specialist. The following deficiencies were identified: · The auditor-employed specialist used data from external sources to develop certain significant assumptions for its independent expectations. The firm did not identify that the auditor-employed specialist did not perform any procedures to evaluate the relevance of these data. (AS 1105.04 and .06; AS 1201.C6 and .C7)

The firm's approach to substantively test the fair value of certain investments was to develop independent expectations of the fair values using the work of an auditor-employed specialist. The following deficiencies were identified: · The firm did not identify that the auditor-employed specialist did not perform any procedures to demonstrate it had a reasonable basis for certain other significant assumptions used for its independent expectations. (AS 1201.C6 and .C7; AS 2501.22)

The firm did not perform sufficient procedures to test investments because it selected for testing underlying investments from the issuer's two largest funds which was not representative of the population of investments. (AS 2315.24)

The sample size the firm used in its substantive procedures to test valuation of investments was too small to provide sufficient appropriate audit evidence because the firm did not take into account appropriate factors such as tolerable misstatement for the population and the characteristics of the population in determining the sample size. (AS 2315.16 .23 and 23A)

The firm did not perform procedures to test the fair values of certain of the issuer's investments. (AS 2502.15)

The issuer reported in its financial statements that it had fully benefit-responsive investment contracts that were recorded at contract value. The firm did not evaluate whether these investment contracts met the criteria to be recorded at contract value in conformity with FASB ASC Topic 962 Plan Accounting —Defined Contribution Pension Plans. (AS 2810.30)

The issuer held certain investments that were categorized as level 3 within the fair value hierarchy as set forth in FASB ASC Topic 820 Fair Value Measurement. The firm's approach for substantively testing the valuation of these investments was to develop independent estimates. The firm did not evaluate the relevance of the pricing information and the appropriateness of another input the firm used in developing its fair value estimates of these investments. (AS 2502.40)

The issuer reported certain equity investments and engaged specialists to estimate the fair value of these investments. The firm's approach for substantively testing the fair value of these investments was to test the issuer's process and the firm used an auditor-engaged specialist to evaluate certain significant assumptions the company's specialists used. The following deficiencies were identified: · With respect to one investment the firm did not perform any procedures to evaluate the reasonableness of certain significant assumptions the company's specialist used to estimate the fair value. (AS 2501.16)

The firm's approach for substantively testing the fair value of certain equity investments was to develop an independent expectation of the estimates using the work of an auditor-employed specialist. The firm did not perform sufficient procedures to test the fair value of these equity investments as follows: · The firm did not identify that the auditor-employed specialist did not perform procedures to demonstrate it had a reasonable basis for certain other assumptions it developed. (AS 1201.C6 and .C7; AS 2501.22)

The firm identified that the issuer's categorization of certain investments within the fair value hierarchy was not in conformity with FASB ASC Topic 820 Fair Value Measurement. The firm did not appropriately evaluate the effect of this GAAP departure on the issuer's financial statements. (AS 2810.30 and .31)

The issuer reported certain equity investments and engaged specialists to estimate the fair value of these investments. The firm's approach for substantively testing the fair value of these investments was to test the issuer's process and the firm used an auditor-engaged specialist to evaluate certain significant assumptions the company's specialists used. The following deficiencies were identified: · With respect to a second investment the firm did not sufficiently evaluate the reasonableness of certain significant assumptions developed by the company's specialist because it did not identify that the auditor-engaged specialist did not perform any procedures to evaluate the reasonableness of these assumptions. (AS 1105.A8b; AS 1210.09 and .12)

The issuer reported certain equity investments and engaged specialists to estimate the fair value of these investments. The firm's approach for substantively testing the fair value of these investments was to test the issuer's process and the firm used an auditor-engaged specialist to evaluate certain significant assumptions the company's specialists used. The following deficiencies were identified: · With respect to a second investment the auditor-engaged specialist did not sufficiently evaluate the reasonableness of another significant assumption because it did not (1) evaluate the relevance of certain external information used in its testing; (2) evaluate whether this assumption was consistent with the issuer's objectives strategies and related business risks; and (3) take into account the issuer's intent and ability to carry out its plans. (AS 1105.04 .06 and .A8b; AS 1210.09 and .12; AS 2501.17)

The issuer reported certain equity investments and engaged specialists to estimate the fair value of these investments. The firm's approach for substantively testing the fair value of these investments was to test the issuer's process and the firm used an auditor-engaged specialist to evaluate certain significant assumptions the company's specialists used. The following deficiencies were identified: · With respect to a third investment the firm did not perform sufficient procedures to test estimates that the company's specialist used to determine the investment's fair value because it did not identify that the auditor-engaged specialist did not perform any procedures with respect to the work the company's specialist performed. (AS 1210.09 and .12; AS 2501.07)

The issuer reported certain equity investments and engaged specialists to estimate the fair value of these investments. The firm's approach for substantively testing the fair value of these investments was to test the issuer's process and the firm used an auditor-engaged specialist to evaluate certain significant assumptions the company's specialists used. The following deficiencies were identified: · With respect to two other investments the firm did not sufficiently evaluate the reasonableness of certain significant assumptions developed by the company's specialists because it did not identify that the auditor-engaged specialist did not perform any procedures to evaluate the relevance and reliability of certain data the company's specialists used to develop these assumptions. (AS 1105.A8a; AS 1210.09 and .12)

The issuer reported certain equity investments and engaged specialists to estimate the fair value of these investments. The firm's approach for substantively testing the fair value of these investments was to test the issuer's process and the firm used an auditor-engaged specialist to evaluate certain significant assumptions the company's specialists used. The following deficiencies were identified: · With respect to two other investments the firm did not identify that the auditor-engaged specialist did not (1) sufficiently evaluate the reasonableness of certain of these assumptions because it did not evaluate the significant differences between the assumptions and the industry information it obtained or (2) perform any procedures to evaluate the reasonableness of the remainder of these assumptions. (AS 1105.A8b; AS 1210.09 and .12)

The issuer reported certain equity investments and engaged a specialist to estimate the fair value of these investments. The company's specialist used the investees' financial results in estimating the fair value. The firm's approach for substantively testing the fair value of these investments was to test the issuer's process and the firm used an auditor-employed specialist to evaluate the significant assumptions developed by the company's specialist. The firm did not sufficiently test the fair value of these investments as follows: · For certain of these significant assumptions the firm did not identify that the auditor-employed specialist did not (1) evaluate the reasonableness of these assumptions and (2) sufficiently evaluate the relevance of certain data from external sources the company's specialist used to develop these assumptions because the auditor-employed specialist did not evaluate the differences between these data and the issuer's investments. (AS 1105.A8a and .A8b; AS 1201.C6 and .C7)

The issuer reported certain equity investments and engaged a specialist to estimate the fair value of these investments. The company's specialist used the investees' financial results in estimating the fair value. The firm's approach for substantively testing the fair value of these investments was to test the issuer's process and the firm used an auditor-employed specialist to evaluate the significant assumptions developed by the company's specialist. The firm did not sufficiently test the fair value of these investments as follows: · The firm did not sufficiently evaluate the investees' financial results it used as audit evidence because it did not (1) perform procedures to address the difference in year ends for certain of the investees and (2) apply or request that another auditor apply appropriate auditing procedures to the unaudited financial statements for certain other investees. (AS 1105.B1 - .B3)

The firm's approach for substantively testing the fair value of certain equity investments was to develop an independent expectation of the estimates using the work of an auditor-employed specialist. The firm did not perform sufficient procedures to test the fair value of these equity investments as follows: · The firm did not identify that the auditor-employed specialist did not perform sufficient procedures to evaluate the relevance of non-industry specific data from external sources it used to develop certain assumptions because the auditor-employed specialist did not evaluate the differences between using non-industry specific data and industry-specific data. (AS 1105.04 and .06; AS 1201.C6 and .C7)

The issuer recorded the fair values of securities based on the prices it received from an external pricing service. The firm selected for testing a control that consisted of for a judgmental sample of securities the comparison of these prices to prices obtained from another external pricing service. The firm did not evaluate whether the control was designed to address the risks of material misstatement presented by the securities not subject to the control given the selection method applied by the issuer. (AS 2201.42)

The sample size the firm used in its substantive procedures to test securities was too small to provide sufficient appropriate audit evidence because these procedures were designed based on a level of control reliance that was not supported due to the deficiency in the firm's control testing discussed above. (AS 2315.19 .23 and .23A)

The firm did not sufficiently evaluate the reasonableness of the assumptions the issuer used to determine the fair value of certain investments because it limited its procedures to comparing the assumptions used at year end to those used in the third quarter and quantifying the effect of the differences. (AS 2502.26 and .28)

To address an identified fraud risk the firm selected investments for testing that exceeded a monetary threshold. The firm did not perform any procedures to address the fraud risk in the remaining population of investments. (AS 1105.27; AS 2301.13)

The firm selected for testing a control over the valuation of certain investments that consisted of the review of analyses and memoranda summarizing established fair values. The firm did not evaluate the review procedures that the control owners performed including the criteria that the control owners used to identify items for follow up and whether those items were appropriately resolved. (AS 2201.42 and .44)

The firm selected for testing a control that included the issuer's review of the comparison of fair values of certain investments provided by external parties for one investment from each investment type held by the issuer. The firm did not evaluate whether the control could effectively prevent or detect a material misstatement as designed. Further 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 did not identify and test any controls over the appropriateness of the classification of investments. (AS 2201.39)