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LaPorte, A Professional Accounting Corporation
United States · Triennially Inspected
- Inspection year
- 2021
- Report date
- 31-Aug-2022
- PCAOB release
- 104-2022-186
- Audits reviewed
- 1
- Audits w/ Part I.A deficiencies
- 1
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 4
- Part I.B deficiencies
- 1
- Report
- View PDF ↗
Deficiencies (4)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A4 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Allowance for Credit/Loan Losses | The firm's approach for substantively testing the ALL included developing an independent expectation of the ALL which included a specific reserve for impaired loans and a general reserve for loans collectively evaluated for impairment. The firm did not perform any procedures to evaluate the reasonableness of certain assumptions used to develop its independent expectation including assumptions provided by the issuer. (AS 2501.09 .10 and .12) [This citation refers to AS 2501 Auditing Accounting Estimates which was in effect for this audit. This standard was replaced by AS 2501 Auditing Accounting Estimates Including Fair Value Measurements which became effective for audits of financial statements for fiscal years ending on or after December 15 2020.] Financial statement audit only | AS 2501.9; AS 2501.10; AS 2501.11 | |
| 2 | Allowance for Credit/Loan Losses | With respect to the specific reserve the firm used appraisals prepared in previous years by external specialists engaged by the issuer to evaluate the fair value of properties used as collateral for certain loans the firm evaluated for impairment. Given the length of time that had passed since the appraisals were prepared the firm applied a discount rate to the fair value of each property as part of its evaluation. The firm did not perform procedures to evaluate the relevance and reliability of these appraisals. Specifically the firm did not perform procedures to evaluate the reasonableness of the methods assumptions and underlying data used in preparing the appraisals. Further the firm did not perform any procedures to evaluate the reasonableness of the discount rate used to evaluate these loans for impairment. (AS 2502.26 .28 and .31) Financial statement audit only | AS 2502.26; AS 2502.28; AS 2502.31 | |
| 3 | Deposit Liabilities | The firm's approach to testing deposit liabilities included reliance on controls. The issuer used a service organization to process and record transactions related to deposit liabilities. The firm obtained the service auditor's report which specified complimentary user controls that addressed the accuracy and completeness of information the issuer used in the operation of certain controls. The firm used this information in its testing of controls over deposit liabilities and in its substantive testing of deposit liabilities. The firm did not test beyond inquiring of management the complimentary user controls associated with deposit liabilities that were identified in the service auditor's report. (AS 2601.14) Financial statement audit only | AS 2601.14 | |
| 4 | Deposit Liabilities | The sample size the firm used in its substantive procedures to test deposit liabilities 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 deficiencies in the firm's control testing discussed above. (AS 2301.16 .18 and 37; AS 2315.19 .23 and .23A) Financial statement audit only | AS 2301.16; AS 2301.18; AS 2301.37; AS 2315.19; AS 2315.23; AS 2315.23A |