- Inspection year
- 2021
- Report date
- 20-Oct-2022
- PCAOB release
- 104-2022-254a
- Audits reviewed
- 2
- Audits w/ Part I.A deficiencies
- 1
- Part I.A deficiency rate
- 50%
- Part I.A deficiencies
- 6
- Part I.B deficiencies
- —
- Report
- View PDF ↗
Deficiencies (6)
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 | Allowance for Credit/Loan Losses | The issuer's general reserve component of the ALL included a qualitative reserve component. In determining the qualitative reserve component the issuer used loan risk grades and basis point adjustments for qualitative factors. The following deficiencies were identified: - The firm identified and tested a control over the review of loan risk grades for loans that met certain criteria. The firm did not identify and test any controls over the review of loan risk grades for loans that did not meet the criteria. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 2 | Allowance for Credit/Loan Losses | The issuer's general reserve component of the ALL included a qualitative reserve component. In determining the qualitative reserve component the issuer used loan risk grades and basis point adjustments for qualitative factors. The following deficiencies were identified: - The firm selected for testing a control that included 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 the loans for potential impairment. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 3 | Allowance for Credit/Loan Losses | The issuer's general reserve component of the ALL included a qualitative reserve component. In determining the qualitative reserve component the issuer used loan risk grades and basis point adjustments for qualitative factors. The following deficiencies were identified: - The firm selected for testing a control that consisted of the issuer's review of the ALL including an evaluation of the qualitative reserve component. The firm did not evaluate the specific review procedures that the control owners performed to evaluate the reasonableness of the basis points for certain qualitative factors used to determine the qualitative reserve component. (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 general reserve component of the ALL included a qualitative reserve component. In determining the qualitative reserve component the issuer used loan risk grades and basis point adjustments for qualitative factors. The following deficiencies were identified: - The firm did not identify and test any controls over the accuracy of a system-generated report used in the operation of a control. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 5 | Allowance for Credit/Loan Losses | The issuer's general reserve component of the ALL included a qualitative reserve component. In determining the qualitative reserve component the issuer used loan risk grades and basis point adjustments for qualitative factors. The following deficiencies were identified: - The firm's approach for substantively testing the ALL was to review and test management's process. With respect to certain qualitative components of the ALL the firm did not evaluate whether the issuer had a reasonable basis for the basis points used 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 | |
| 6 | Allowance for Credit/Loan Losses | The issuer's general reserve component of the ALL included a qualitative reserve component. In determining the qualitative reserve component the issuer used loan risk grades and basis point adjustments for qualitative factors. The following deficiencies were identified: - The sample size the firm used in its substantive procedures to test the reasonableness of loan risk grades 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) Both financial statement and ICFR audits | AS 2301.16; AS 2301.18; AS 2301.37; AS 2315.19; AS 2315.23; AS 2315.23A |