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Deloitte & Touche LLP
United States · Deloitte Touche Tohmatsu Limited · Annually Inspected
- Inspection year
- 2018
- Report date
- 28-Apr-2020
- PCAOB release
- 104-2020-008a
- Audits reviewed
- 52
- Audits w/ Part I.A deficiencies
- 6
- Part I.A deficiency rate
- 12%
- Part I.A deficiencies
- 8
- Part I.B deficiencies
- 2
- Report
- View PDF ↗
Deficiencies (8)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer generated certain revenue at numerous locations from sales of multiple types of products. The firm selected for testing controls over this revenue that included (1) reviews of each location's monthly operating results and (2) reviews of monthly and year-to-date revenue for each type of product. The firm did not evaluate the specific review procedures that the control owners performed to evaluate whether the amounts recognized as revenue were appropriate. (AS 2201.42 and .44) ICFR audit only | AS 2201.42; AS 2201.44 |
Issuer B2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Liabilities for Unpaid Insurance Claims | The issuer was self-insured for certain liabilities and it used a service organization to administer the majority of the related claims. The claims data processed by this service organization were used to estimate the issuer's liabilities for unpaid insurance claims. The firm selected for testing a control over the accuracy of these claims data that consisted of claim audits performed by the service organization. The firm obtained the service auditor's report on the operating effectiveness of the service organization's controls but did not identify that the service auditor's testing of this control did not address the accuracy of the claims data. (AS 2201.B21) Both financial statement and ICFR audits | AS 2201.B21 | |
| 2 | Liabilities for Unpaid Insurance Claims | The firm's approach for testing the liabilities for unpaid insurance claims was to develop an independent estimate. The firm did not perform substantive procedures to test or (as discussed above) to sufficiently test controls over the accuracy of claims data used in its independent estimate beyond comparing a sample of claims from the service organization's claims processing system to claims data in the same system. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 |
Issuer C2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Liabilities for Self-Insurance Reserves | The issuer used claims activity reports to estimate its self-insurance reserves. The firm selected for testing a control that included a review of these claims activity reports for accuracy. The firm did not evaluate the specific procedures that the control owner performed to address the accuracy of certain data including claims' incident dates in the claims activity reports. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 2 | Liabilities for Self-Insurance Reserves | The firm's approach for testing the self-insurance reserves was to develop an independent estimate. The firm did not perform substantive procedures to test or (as discussed above) to sufficiently test controls over the accuracy of claims' incident dates used in its independent estimate beyond comparing the incident dates in the claims activity reports to the system that generated those reports. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 |
Issuer D1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Investments | 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) ICFR audit only | AS 2201.42; AS 2201.44 |
Issuer E1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Liabilities for Incurred But Not Reported Claims | The issuer used historical claims data to estimate the liabilities for incurred but not reported claims. These data consisted of numerous loss triangles that included monthly historical claims incurred and claims adjudicated or paid for multiple periods. For one of the issuer's reporting segments the firm selected for testing an automated application control over the generation of reports containing historical claims data. The firm did not test the configuration of the automated control or perform other procedures that would have provided sufficient appropriate audit evidence that the automated control was designed and operating effectively. (AS 2201.42 .44 and .B9) ICFR audit only | AS 2201.42; AS 2201.44; AS 2201.B9 |
Issuer F1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Deposit Liabilities | The firm sent positive confirmation requests to the issuer's customers for a sample of deposit liabilities. For the items in its sample for which the requested confirmations were not returned the firm did not perform alternative procedures that provided sufficient evidence that the recorded amounts of the deposit liabilities were accurate as of the confirmation date. (AS 2310.31) Financial statement audit only | AS 2310.31 |