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PricewaterhouseCoopers LLP
United States · PricewaterhouseCoopers International Limited · Annually Inspected
- Inspection year
- 2022
- Report date
- 30-Nov-2023
- PCAOB release
- 104-2024-036
- Audits reviewed
- 54
- Audits w/ Part I.A deficiencies
- 5
- Part I.A deficiency rate
- 9%
- Part I.A deficiencies
- 18
- Part I.B deficiencies
- 5
- Report
- View PDF ↗
Deficiencies (18)
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 | Business Combinations | During the year the issuer acquired a business and engaged a specialist to determine the fair value of the acquired loans. The company's specialist determined this fair value based on discounted cash flows it developed using various inputs and assumptions including expected credit losses loan risk ratings certain loan attributes and whether certain loans should be designated as purchased with credit deterioration. The following deficiencies were identified: · The firm selected for testing a control that included the issuer's review of the expected credit loss assumptions used to value the acquired loans but did not evaluate the specific review procedures that the control owners performed to assess the reasonableness of these assumptions. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 2 | Business Combinations | During the year the issuer acquired a business and engaged a specialist to determine the fair value of the acquired loans. The company's specialist determined this fair value based on discounted cash flows it developed using various inputs and assumptions including expected credit losses loan risk ratings certain loan attributes and whether certain loans should be designated as purchased with credit deterioration. The following deficiencies were identified: · The firm did not identify and test any controls over the accuracy and completeness of the acquired loan information that the issuer provided to the company's specialist that the specialist used to determine the fair value of the acquired loans. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 3 | Business Combinations | During the year the issuer acquired a business and engaged a specialist to determine the fair value of the acquired loans. The company's specialist determined this fair value based on discounted cash flows it developed using various inputs and assumptions including expected credit losses loan risk ratings certain loan attributes and whether certain loans should be designated as purchased with credit deterioration. The following deficiencies were identified: · The firm selected for testing a control that consisted of the issuer's review for a sample of loans of the loan risk ratings assigned to certain acquired commercial loans. The firm did not evaluate whether the sample of loans that were reviewed was sufficient to address the risks of material misstatement presented by the different risk characteristics inherent in the population of these acquired commercial loans. (AS 2201.42) Both financial statement and ICFR audits | AS 2201.42 | |
| 4 | Business Combinations | During the year the issuer acquired a business and engaged a specialist to determine the fair value of the acquired loans. The company's specialist determined this fair value based on discounted cash flows it developed using various inputs and assumptions including expected credit losses loan risk ratings certain loan attributes and whether certain loans should be designated as purchased with credit deterioration. The following deficiencies were identified: · The firm selected for testing a control that consisted of the issuer's review for a sample of loans of the loan risk ratings assigned to certain acquired commercial loans. The firm did not identify and test any controls that addressed the reasonableness of the loan risk ratings assigned to certain other acquired commercial loans that were not subject to the loan risk rating review control. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 5 | Business Combinations | During the year the issuer acquired a business and engaged a specialist to determine the fair value of the acquired loans. The company's specialist determined this fair value based on discounted cash flows it developed using various inputs and assumptions including expected credit losses loan risk ratings certain loan attributes and whether certain loans should be designated as purchased with credit deterioration. The following deficiencies were identified: · The firm selected for testing controls that consisted of the issuer's review of the accuracy and completeness of certain data related to the acquired loans but did not test the aspects of these controls that addressed the accuracy of certain loan attributes that the company's specialist used. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 6 | Business Combinations | During the year the issuer acquired a business and engaged a specialist to determine the fair value of the acquired loans. The company's specialist determined this fair value based on discounted cash flows it developed using various inputs and assumptions including expected credit losses loan risk ratings certain loan attributes and whether certain loans should be designated as purchased with credit deterioration. The following deficiencies were identified: · The firm selected for testing a control that consisted of the issuer's review of acquired loans that were designated as purchased with credit deterioration. The firm did not identify and test any controls over the accuracy and completeness of the loan information that the control owner used in the operation of this control. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 7 | Allowance for Credit/Loan Losses | The issuer assigned a risk rating to each commercial loan. The loan risk rating was an important input (1) in estimating the ACL for commercial loans collectively assessed for impairment and (2) in determining the fair value of a certain type of commercial loans that the issuer reclassifies to available-for-sale (AFS) securities for financial reporting purposes. The firm's sample to test the reasonableness of the risk ratings for commercial loans including loans reclassified to AFS securities was too small because in determining its sample the firm did not consider certain characteristics of the loan population including whether the population of loans reclassified to AFS securities should have been tested separately. (AS 2315.16 .23 and .23A) Both financial statement and ICFR audits | AS 2315.16; AS 2315.23; AS 2315.23A |
Issuer B7 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Business Combinations | During the year the issuer acquired a business. The acquired assets primarily consisted of oil and gas properties that had oil and gas reserves assigned (“proved properties”) and properties that had no oil and gas reserves assigned (“unproved properties”). The issuer determined the fair value of the acquired oil and gas properties based on discounted cash flows it developed using various assumptions including future production volumes and certain adjustment factors. The following deficiencies were identified: · The firm selected for testing a control that included the issuer's review of the future production volume assumptions used for unproved properties but did not evaluate the specific review procedures the control owner performed to assess the reasonableness of these assumptions. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | Significant risk |
| 2 | Business Combinations | During the year the issuer acquired a business. The acquired assets primarily consisted of oil and gas properties that had oil and gas reserves assigned (“proved properties”) and properties that had no oil and gas reserves assigned (“unproved properties”). The issuer determined the fair value of the acquired oil and gas properties based on discounted cash flows it developed using various assumptions including future production volumes and certain adjustment factors. The following deficiencies were identified: · The firm did not sufficiently evaluate the reasonableness of the significant future production volume assumptions the issuer used to determine the fair value for unproved properties because the firm's procedures were limited to comparing the future production volumes to the issuer's estimated future development costs by year and concluding that they were highly correlated. (AS 2501.16) Both financial statement and ICFR audits | AS 2501.16 | Significant risk |
| 3 | Business Combinations | During the year the issuer acquired a business. The acquired assets primarily consisted of oil and gas properties that had oil and gas reserves assigned (“proved properties”) and properties that had no oil and gas reserves assigned (“unproved properties”). The issuer determined the fair value of the acquired oil and gas properties based on discounted cash flows it developed using various assumptions including future production volumes and certain adjustment factors. The following deficiencies were identified: · The firm selected for testing a control that included the issuer's review of the adjustment factor assumptions used but did not evaluate whether the thresholds the control owner used to identify items for investigation were sufficiently precise to detect material misstatements. (AS 2201.42) Both financial statement and ICFR audits | AS 2201.42 | Significant risk |
| 4 | Business Combinations | During the year the issuer acquired a business. The acquired assets primarily consisted of oil and gas properties that had oil and gas reserves assigned (“proved properties”) and properties that had no oil and gas reserves assigned (“unproved properties”). The issuer determined the fair value of the acquired oil and gas properties based on discounted cash flows it developed using various assumptions including future production volumes and certain adjustment factors. The following deficiencies were identified: · The firm did not evaluate whether the issuer had a reasonable basis for certain of the significant adjustment factor assumptions it used. (AS 2501.16) Both financial statement and ICFR audits | AS 2501.16 | Significant risk |
| 5 | Business Combinations | During the year the issuer acquired a business. The acquired assets primarily consisted of oil and gas properties that had oil and gas reserves assigned (“proved properties”) and properties that had no oil and gas reserves assigned (“unproved properties”). The issuer determined the fair value of the acquired oil and gas properties based on discounted cash flows it developed using various assumptions including future production volumes and certain adjustment factors. The following deficiencies were identified: · The firm did not identify and test any controls that addressed whether all of the acquired leases that were associated with oil and gas properties were recognized. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | Significant risk |
| 6 | Business Combinations | During the year the issuer acquired a business. The acquired assets primarily consisted of oil and gas properties that had oil and gas reserves assigned (“proved properties”) and properties that had no oil and gas reserves assigned (“unproved properties”). The issuer determined the fair value of the acquired oil and gas properties based on discounted cash flows it developed using various assumptions including future production volumes and certain adjustment factors. The following deficiencies were identified: · The firm did not perform any substantive procedures to test whether all of the acquired leases that were associated with unproved properties were recognized. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 | Significant risk |
| 7 | Business Combinations | During the year the issuer acquired a business. The acquired assets primarily consisted of oil and gas properties that had oil and gas reserves assigned (“proved properties”) and properties that had no oil and gas reserves assigned (“unproved properties”). The issuer determined the fair value of the acquired oil and gas properties based on discounted cash flows it developed using various assumptions including future production volumes and certain adjustment factors. The following deficiencies were identified: · To test the acquired leases that were associated with unproved properties the firm made its selections from a report but did not test or test controls over the completeness of this report. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | Significant risk |
Issuer C2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Allowance for Credit/Loan Losses | The issuer assigned a risk rating to each commercial loan. The loan risk rating was an important input in estimating the ACL for commercial loans collectively assessed for impairment. The following deficiencies were identified: · The firm identified a deficiency related to a control that consisted of the issuer's periodic review of loan risk ratings assigned to certain commercial loans. The firm tested various controls that it believed would compensate for this deficiency but did not identify that these controls did not address whether the risk ratings were reviewed and updated timely. (AS 2201.68) Both financial statement and ICFR audits | AS 2201.68 | |
| 2 | Allowance for Credit/Loan Losses | The issuer assigned a risk rating to each commercial loan. The loan risk rating was an important input in estimating the ACL for commercial loans collectively assessed for impairment. The following deficiencies were identified: · The firm's sample to test the reasonableness of the risk ratings for certain commercial loans was too small because in determining its sample the firm did not consider certain characteristics of the loan population. (AS 2315.16 .23 and .23A) Both financial statement and ICFR audits | AS 2315.16; AS 2315.23; AS 2315.23A |
Issuer D1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Accounts Payable | The firm excluded from the scope of its audits certain accounts payable at certain of the issuer's business units. The firm did not evaluate whether the risks of material misstatement that the firm associated with accounts payable subject to audit procedures also applied to the excluded accounts payable. (AS 2101.11 and .12; AS 2201.B10) Both financial statement and ICFR audits | AS 2101.11; AS 2101.12; AS 2201.B10 |
Issuer E1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Inventory | Certain of the issuer's inventory was subject to cycle counts and the issuer used its inventory systems to determine the frequency with which the items should be counted by assigning a designation to each inventory item. The firm selected for testing a control that consisted of the issuer's cycle-count procedures. The firm did not test the aspects of this control that addressed whether each system assigned the appropriate designation to each inventory item the systems were properly configured to ensure that each inventory item was counted with sufficient frequency in accordance with the assigned designation and inventory counts were performed in accordance with the designated count frequency. (AS 2201.42 and .44) ICFR audit only | AS 2201.42; AS 2201.44 |