- Inspection year
- 2020
- Report date
- 16-Dec-2021
- PCAOB release
- 104-2022-002
- Audits reviewed
- 15
- Audits w/ Part I.A deficiencies
- 4
- Part I.A deficiency rate
- 27%
- Part I.A deficiencies
- 7
- Part I.B deficiencies
- —
- Report
- View PDF ↗
Deficiencies (7)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Allowance for Credit/Loan Losses | For loans that were collectively evaluated for impairment the issuer determined the qualitative reserve component of the ALL using certain qualitative factors. The following deficiencies were identified: • The firm selected for testing a control that consisted of the issuer's review of the qualitative reserve component of the ALL including an assessment of the qualitative factors for reasonableness. The firm did not evaluate the specific review procedures that the control owner performed to assess the reasonableness of the qualitative factors. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 2 | Allowance for Credit/Loan Losses | For loans that were collectively evaluated for impairment the issuer determined the qualitative reserve component of the ALL using certain qualitative factors. The following deficiencies were identified: • The firm's approach for substantively testing 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 were limited to (1) reading the issuer's ALL memorandum and (2) comparing the qualitative factors the issuer used at year end to those used in prior periods. (AS 2501.09 .10 and .11) Both financial statement and ICFR audits | AS 2501.9; AS 2501.10; AS 2501.11 |
Issuer B2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Allowance for Credit/Loan Losses | For loans that were collectively evaluated for impairment the issuer determined one of the qualitative reserve components of the ALL using certain qualitative factors. The following deficiencies were identified: • The firm selected for testing a control that included the issuer's review of this qualitative reserve component of the ALL including an assessment of the qualitative factors for reasonableness. The firm did not evaluate the specific review procedures that the control owner performed to assess the reasonableness of these qualitative factors. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 2 | Allowance for Credit/Loan Losses | For loans that were collectively evaluated for impairment the issuer determined one of the qualitative reserve components of the ALL using certain qualitative factors. The following deficiencies were identified: • The firm's approach for substantively testing 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 were limited to (1) reading the issuer's ALL memorandum and related analysis of the factors and (2) comparing the qualitative factors the issuer used at year end to those used in prior periods. (AS 2501.09 .10 and .11) Both financial statement and ICFR audits | AS 2501.9; AS 2501.10; AS 2501.11 |
Issuer C2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Allowance for Credit/Loan Losses | For loans that were collectively evaluated for impairment the issuer determined the qualitative reserve component of the ALL using certain qualitative factors. The following deficiencies were identified: • The firm selected for testing a control that consisted of the issuer's reviews of the qualitative factors. The firm did not evaluate the specific review procedures that the control owners performed to assess the reasonableness of certain adjustments that the issuer made to the calculation of these qualitative factors. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 2 | Allowance for Credit/Loan Losses | For loans that were collectively evaluated for impairment the issuer determined the qualitative reserve component of the ALL using certain qualitative factors. The following deficiencies were identified: • The firm's approach for substantively testing 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 did not perform procedures to evaluate certain adjustments that the issuer made to the calculation of these qualitative factors the issuer used to determine the reserve. (AS 2501.09 .10 and .11) Both financial statement and ICFR audits | AS 2501.9; AS 2501.10; AS 2501.11 |
Issuer D1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer recognized revenue from customer contracts over time based on costs incurred to date relative to total estimated costs to complete the contracts. For certain of these contracts that were selected for testing the firm did not evaluate the reasonableness of the estimated costs to complete beyond (1) comparing for each contract the estimated costs to complete at year end to the estimated costs to complete at the subsequent month end and (2) inquiring of management. (AS 2501.07) Financial statement audit only | AS 2501.7 |