- Inspection year
- 2021
- Report date
- 29-Sep-2022
- PCAOB release
- 104-2022-205
- Audits reviewed
- 1
- Audits w/ Part I.A deficiencies
- 1
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 8
- Part I.B deficiencies
- —
- 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 used a service organization to host maintain and manage the information technology (IT) system that the issuer used to initiate process and record transactions related to the ALL. The firm did not identify and test any complementary user entity controls to place reliance on or identify and test any other controls over the accuracy and completeness of data from the service organization that was used in the operation of controls. (AS 2201.39 and .B22) Both financial statement and ICFR audits | AS 2201.39; AS 2201.B22 | |
| 2 | Allowance for Credit/Loan Losses | The issuer used a service organization to host maintain and manage the information technology (IT) system that the issuer used to initiate process and record transactions related to the ALL. The firm selected for testing controls that consisted of the issuer's review of access to this information system. The firm did not evaluate the specific review procedures that the control owners performed to determine whether to initially grant access to users and whether the granted role access continued to be appropriate. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 3 | Allowance for Credit/Loan Losses | The firm did not identify and test any controls over the accuracy and completeness of information the control owner obtained from other information systems and used in the operation of certain controls. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 4 | Allowance for Credit/Loan Losses | The firm selected for testing a control that consisted of the issuer's review of certain loans for potential impairment. The firm did not evaluate the specific review procedures that the control owners performed to review these loans for potential impairment. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 5 | Allowance for Credit/Loan Losses | For loans that were collectively evaluated for impairment the issuer determined the qualitative reserve component of the ALL that included a qualitative base adjustment based on basis points established for certain qualitative factors and a qualitative overlay adjustment based on assumptions provided by the company's specialist. The firm selected for testing certain controls that consisted of the issuer's review of the ALL including an assessment of the qualitative reserve component. The firm did not evaluate the specific review procedures that the control owners performed to assess the reasonableness of the qualitative reserve component of the ALL. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 6 | Allowance for Credit/Loan Losses | The firm's approach for substantively testing the ALL was to test the issuer's process. The firm did not evaluate whether the issuer had a reasonable basis for the basis points used for the qualitative base adjustment and for its selection of basis points from a range of potential basis points. (AS 2501.16) Both financial statement and ICFR audits | AS 2501.16 | |
| 7 | Allowance for Credit/Loan Losses | The firm's approach for substantively testing the ALL was to test the issuer's process. The firm did not evaluate the reasonableness of the assumptions developed by the company's specialist that were used in the qualitative overlay adjustment. (AS 1105.A8b) Both financial statement and ICFR audits | AS 1105.A8b | |
| 8 | Allowance for Credit/Loan Losses | The engagement team did not perform any substantive procedures to test or as discussed above sufficiently test controls over the accuracy and completeness of reports from the issuer's systems that the firm used as audit evidence in its substantive procedures. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 |