- Inspection year
- 2021
- Report date
- 31-Aug-2022
- PCAOB release
- 104-2022-191
- Audits reviewed
- 2
- Audits w/ Part I.A deficiencies
- 1
- Part I.A deficiency rate
- 50%
- Part I.A deficiencies
- 8
- Part I.B deficiencies
- 1
- 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 A8 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Allowance for Credit/Loan Losses | The issuer's ALL included a reserve for loans individually evaluated for impairment ('specific reserve') and a reserve for loans collectively evaluated for impairment ('collective reserve'). The issuer's collective reserve included a component that was determined by using certain qualitative factors ('qualitative component'). The following deficiencies were identified: · The firm selected for testing controls that consisted of the issuer's reviews of the ALL including the collective reserve. The firm did not evaluate the specific review procedures that the control owners performed to assess the reasonableness of the ALL including the appropriateness of the basis points applied to determine the qualitative component. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 2 | Allowance for Credit/Loan Losses | The issuer's ALL included a reserve for loans individually evaluated for impairment ('specific reserve') and a reserve for loans collectively evaluated for impairment ('collective reserve'). The issuer's collective reserve included a component that was determined by using certain qualitative factors ('qualitative component'). The following deficiencies were identified: · The firm selected for testing controls that consisted of the issuer's reviews of the ALL including the collective reserve. The firm did not identify and test any controls over the accuracy and completeness of certain data and/or reports used in the operation of these controls. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 3 | Allowance for Credit/Loan Losses | The issuer's ALL included a reserve for loans individually evaluated for impairment ('specific reserve') and a reserve for loans collectively evaluated for impairment ('collective reserve'). The issuer's collective reserve included a component that was determined by using certain qualitative factors ('qualitative component'). The following deficiencies were identified: · The firm selected for testing controls that consisted of the issuer's reviews of its loan portfolio to identify potentially impaired loans for the specific reserve. The firm did not evaluate the specific review procedures that the control owners performed to assess the completeness of loans the issuer assessed individually for impairment. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 4 | Allowance for Credit/Loan Losses | The issuer's ALL included a reserve for loans individually evaluated for impairment ('specific reserve') and a reserve for loans collectively evaluated for impairment ('collective reserve'). The issuer's collective reserve included a component that was determined by using certain qualitative factors ('qualitative component'). The following deficiencies were identified: · The firm selected for testing controls that consisted of the issuer's reviews of its loan portfolio to identify potentially impaired loans for the specific reserve. The firm did not identify and test any controls over the accuracy and completeness of certain data and/or reports used in the operation of these controls. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 5 | Allowance for Credit/Loan Losses | The issuer's ALL included a reserve for loans individually evaluated for impairment ('specific reserve') and a reserve for loans collectively evaluated for impairment ('collective reserve'). The issuer's collective reserve included a component that was determined by using certain qualitative factors ('qualitative component'). The following deficiencies were identified: · The firm selected for testing a control that consisted of the issuer's review of the valuation of impaired loans. The firm did not evaluate the specific review procedures that the control owner performed to assess the appropriateness of the methods and assumptions used to determine the valuation of the specific reserve for these impaired loans. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 6 | Allowance for Credit/Loan Losses | The issuer's ALL included a reserve for loans individually evaluated for impairment ('specific reserve') and a reserve for loans collectively evaluated for impairment ('collective reserve'). The issuer's collective reserve included a component that was determined by using certain qualitative factors ('qualitative component'). The following deficiencies were identified: · The firm's approach for substantively testing the collective reserve was to review and test management's process. The firm did not perform procedures to evaluate the reasonableness of the basis points that were applied to determine the qualitative component beyond comparing these basis points to the basis points that were applied in prior years and assessing whether certain changes or lack thereof to the basis points from the prior year were directionally consistent with internal or external data and performing procedures to test certain data. (AS 2501.09 .10 and .11) [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.] Both financial statement and ICFR audits | AS 2501.9; AS 2501.10; AS 2501.11 | |
| 7 | Journal Entries | The firm selected for testing a control that consisted of the issuer's review of recorded manual journal entries. The firm did not evaluate the specific review procedures that the control owner performed to assess the appropriateness of these journal entries. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 8 | Journal Entries | The firm selected for testing a control that consisted of the issuer's review of recorded manual journal entries. The firm did not identify and test any controls over the accuracy and completeness of the reports used in the operation of this control. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 |