- Inspection year
- 2019
- Report date
- 21-Sep-2021
- PCAOB release
- 104-2021-174
- Audits reviewed
- 7
- Audits w/ Part I.A deficiencies
- 4
- Part I.A deficiency rate
- 57%
- Part I.A deficiencies
- 10
- Part I.B deficiencies
- 2
- Report
- View PDF ↗
Deficiencies (10)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A6 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer processed and recorded revenue transactions using its general ledger system. The firm tested certain automated and information technology ('IT')-dependent manual controls that used data and reports generated by or maintained in the general ledger system. The firm's approach to test the accuracy and completeness of these data and reports depended on effective IT general controls ('ITGCs'). In response to an ineffective ITGC over the issuer's general ledger system the firm selected for testing a compensating control that consisted of a review of system changes. 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 a result the firm's testing of these automated and IT-dependent manual controls over these areas was not sufficient. (AS 2201.46 and .68) Both financial statement and ICFR audits | AS 2201.46; AS 2201.68 | |
| 2 | Revenue | The firm selected for testing two controls over the review of revenue. 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. Further the firm did not perform procedures to test whether the controls were operating as designed. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 3 | Revenue | The firm selected a sample of transactions to test that revenue was appropriately recognized. In its sample the firm did not test certain aspects of the transactions including valuation. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 | |
| 4 | Certain Receivables | The firm sent positive confirmation requests as of an interim date. The firm did not test or in the alternative identify and test controls over the completeness of the listing used to make its selections for confirmation. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 5 | Certain Receivables | The firm performed alternative procedures for confirmations that were not returned by comparing selected amounts to a report of subsequent cash receipts compiled by the firm using issuer data. The firm did not test or in the alternative identify and test controls over the accuracy and completeness of the issuer data the firm used to compile the cash receipts report. (AS 1105.10; AS 2310.33) Both financial statement and ICFR audits | AS 1105.10; AS 2310.33 | |
| 6 | Certain Receivables | The firm did not test or in the alternative identify and test controls over the accuracy and completeness of the issuer data used in its roll forward procedures performed from the date of confirmation to year end. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 |
Issuer B2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Allowance for Credit/Loan Losses | The firm selected for testing several controls that consisted of reviews of aspects of the issuer's loan portfolio to evaluate the reasonableness of loan grades and the identification of problem loans that management used in its evaluation of the ALL. The firm did not evaluate the specific criteria the control owners used to identify individual loans for follow up and whether loans meeting such criteria were identified for investigation and resolved. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 2 | Deposits | The firm used the results from internal audit ('IA')'s deposit confirmation testing for certain deposit accounts. The firm did not test any of the work performed by IA. (AS 2605.20-.21 .24 and .26) Both financial statement and ICFR audits | AS 2605.20; AS 2605.21; AS 2605.24; AS 2605.26 |
Issuer C1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Investments | 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) Financial statement audit only | AS 2315.24 |
Issuer D1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Loans | The firm's approach for testing the issuer's loan portfolio consisted of sending positive confirmation requests for loans greater than a certain amount and negative confirmation requests for a sample of loans below that threshold. For loans below the threshold the firm did not perform any other procedures to test the existence of those loans. (AS 2301.08) Financial statement audit only | AS 2301.8 |