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Baker Newman & Noyes, P.A. Limited Liability Company
United States · Triennially Inspected
- Inspection year
- 2023
- Report date
- 16-Nov-2023
- PCAOB release
- 104-2024-005
- Audits reviewed
- 1
- Audits w/ Part I.A deficiencies
- 1
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 7
- Part I.B deficiencies
- 1
- 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 A7 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Allowance for Credit/Loan Losses | The issuer determined the qualitative component of the ALL by applying basis points to each qualitative factor. The firm's approach for substantively testing the qualitative component was to test the issuer's process and develop an independent expectation. The following deficiencies were identified: · The firm did not evaluate whether the issuer had a reasonable basis for the significant assumptions related to the basis points used. (AS 2501.16) Financial statement audit only | AS 2501.16 | |
| 2 | Allowance for Credit/Loan Losses | The issuer determined the qualitative component of the ALL by applying basis points to each qualitative factor. The firm's approach for substantively testing the qualitative component was to test the issuer's process and develop an independent expectation. The following deficiencies were identified: · The firm did not evaluate the relevance of external information it used to develop its independent expectation. (AS 1105.04 and .06) Financial statement audit only | AS 1105.4; AS 1105.6 | |
| 3 | Allowance for Credit/Loan Losses | The issuer determined the qualitative component of the ALL by applying basis points to each qualitative factor. The firm's approach for substantively testing the qualitative component was to test the issuer's process and develop an independent expectation. The following deficiencies were identified: · The firm did not perform procedures to demonstrate it had a reasonable basis for the assumptions it used to develop its independent expectation. (AS 2501.22) Financial statement audit only | AS 2501.22 | |
| 4 | Allowance for Credit/Loan Losses | The issuer determined the qualitative component of the ALL by applying basis points to each qualitative factor. The firm's approach for substantively testing the qualitative component was to test the issuer's process and develop an independent expectation. The following deficiencies were identified: · The firm did not perform any procedures to demonstrate that the range it used for its independent expectation encompassed only reasonable outcomes and was supported by sufficient appropriate audit evidence. (AS 2501.25) Financial statement audit only | AS 2501.25 | |
| 5 | Allowance for Credit/Loan Losses | The issuer also reported an unallocated component of the ALL. The firm did not evaluate the reasonableness of the significant assumptions the issuer used to develop this component. (AS 2501.16) Financial statement audit only | AS 2501.16 | |
| 6 | Loans | The firm used confirmations to test the existence of loans. The sample size did not provide sufficient appropriate audit evidence because it was based on a level of reliance on other substantive procedures that was not supported given the nature and scope of those other substantive procedures. (AS 2315.19 .23 and .23A) Financial statement audit only | AS 2315.19; AS 2315.23; AS 2315.23A | |
| 7 | Loans | The firm used negative confirmations to substantively test the existence of certain types of loans. The firm's use of negative confirmations did not reduce audit risk to an acceptable level because the population of such loans was not comprised of a large number of small balances. (AS 2310.20) Financial statement audit only | AS 2310.20 |