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T.E. Lott and Company, A Professional Association
United States · Triennially Inspected
- Inspection year
- 2023
- Report date
- 11-Dec-2023
- PCAOB release
- 104-2024-025
- Audits reviewed
- 1
- Audits w/ Part I.A deficiencies
- 1
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 6
- Part I.B deficiencies
- 6
- 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 firm's approach to testing loans and the ALL included reliance on certain controls. The issuer used a service organization to process and record transactions related to loans and this loan information was used in the firm's procedures to test loans and the ALL. The firm did not perform procedures beyond inquiring of management to test complementary user controls over loans identified in the service auditor's report. (AS 2601.14) Financial statement audit only | AS 2601.14 | Significant risk |
| 2 | Allowance for Credit/Loan Losses | The issuer's ALL consisted of a qualitative component and an unallocated reserve component. The firm's approach for substantively testing the ALL was to both test the issuer's process and develop an independent expectation of the estimate. The following deficiencies were identified: · The firm used the issuer's loan grades in its independent expectation. The firm selected loans that met specific criteria to test the loan's assigned grade. The firm did not perform procedures to test loan grades for the remaining population of loans. (AS 1105.27; AS 2301.08 and .11) Financial statement audit only | AS 1105.27; AS 2301.8; AS 2301.11 | Significant risk |
| 3 | Allowance for Credit/Loan Losses | The issuer's ALL consisted of a qualitative component and an unallocated reserve component. The firm's approach for substantively testing the ALL was to both test the issuer's process and develop an independent expectation of the estimate. The following deficiencies were identified: · The firm did not evaluate whether the issuer had a reasonable basis for the significant assumptions it used to develop the qualitative component. (AS 2501.16) Financial statement audit only | AS 2501.16 | Significant risk |
| 4 | Allowance for Credit/Loan Losses | The issuer's ALL consisted of a qualitative component and an unallocated reserve component. The firm's approach for substantively testing the ALL was to both test the issuer's process and develop an independent expectation of the estimate. The following deficiencies were identified: · The firm did not evaluate the reasonableness of the significant assumptions the issuer used to develop the unallocated reserve component. (AS 2501.16) Financial statement audit only | AS 2501.16 | Significant risk |
| 5 | Allowance for Credit/Loan Losses | The issuer's ALL consisted of a qualitative component and an unallocated reserve component. The firm's approach for substantively testing the ALL was to both test the issuer's process and develop an independent expectation of the estimate. 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 | Significant risk |
| 6 | Allowance for Credit/Loan Losses | The issuer's ALL consisted of a qualitative component and an unallocated reserve component. The firm's approach for substantively testing the ALL was to both test the issuer's process and develop an independent expectation of the estimate. The following deficiencies were identified: · The firm did not perform procedures to demonstrate it had a reasonable basis for certain assumptions it used to develop its independent expectation. (AS 2501.22) Financial statement audit only | AS 2501.22 | Significant risk |