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Deloitte & Touche LLP
United States · Deloitte Touche Tohmatsu Limited · Annually Inspected
- Inspection year
- 2023
- Report date
- 23-May-2024
- PCAOB release
- 104-2024-077
- Audits reviewed
- 56
- Audits w/ Part I.A deficiencies
- 12
- Part I.A deficiency rate
- 21%
- Part I.A deficiencies
- 26
- Part I.B deficiencies
- 9
- Report
- View PDF ↗
Deficiencies (26)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Allowance for Credit/Loan Losses | The firm's approach for substantively testing the valuation of acquired loans as of the acquisition date and at year end was to test the issuer's process. The firm did not evaluate whether the methods the issuer used to value these loans were in conformity with GAAP including the requirements of FASB ASC Topic 310 Receivables related to (1) whether the acquired assets included loans with deterioration in credit quality since origination and (2) the measurement of purchased impaired loans. (AS 2501.10) Both financial statement and ICFR audits | AS 2501.10 | |
| 2 | Allowance for Credit/Loan Losses | With respect to the allowance for loan losses (ALL) at one of the issuer's subsidiaries: The firm selected for testing a control that consisted of the issuer's review of the ALL. The firm did not identify and test any controls over the completeness of a manually prepared spreadsheet that was used in the operation of this control. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 3 | Allowance for Credit/Loan Losses | With respect to the allowance for loan losses (ALL) at one of the issuer's subsidiaries: The firm used this spreadsheet in its substantive testing of the ALL but did not perform any procedures to test or test any controls over the completeness of this spreadsheet. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 |
Issuer B2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm's internal inspection program had inspected this audit reviewed these areas and also identified the deficiencies below. The firm's substantive procedures to test revenue at certain of the issuer's locations consisted of substantive analytical procedures. For these substantive analytical procedures the firm developed its expectations in part using data derived from the recorded amounts of revenue. The firm did not evaluate whether these data were sufficiently relevant and reliable for the purpose of achieving its audit objectives. (AS 1105.04 and .06; AS 2305.16) Both financial statement and ICFR audits | AS 1105.4; AS 1105.6; AS 2305.16 | |
| 2 | Goodwill | The firm's internal inspection program had inspected this audit reviewed these areas and also identified the deficiencies below. For two of the issuer's reporting units the firm selected for testing controls that consisted of the issuer's reviews of the forecasts used in its goodwill impairment analysis including certain assumptions used in these forecasts. The firm 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 |
Issuer C3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm did not perform any substantive procedures to test certain revenue. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 | |
| 2 | Inventory | The issuer valued certain inventory using the last-in first-out (LIFO) method. The following deficiencies were identified: · The firm did not identify and test any controls over the LIFO inventory reserve. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 3 | Inventory | The issuer valued certain inventory using the last-in first-out (LIFO) method. The following deficiencies were identified: · The firm did not perform any substantive procedures to test the LIFO inventory reserve. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 |
Issuer D4 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Investment Securities | The issuer recorded certain investment securities at fair value based on cash-flow models. The following deficiencies were identified: · The firm did not identify and test any controls over these cash-flow models including the data and assumptions the issuer used in these cash-flow models. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 2 | Investment Securities | The issuer recorded certain investment securities at fair value based on cash-flow models. The following deficiencies were identified: · The firm did not perform any substantive procedures to test the fair value of these investment securities as of the issuer's year end. (AS 2501.07) Both financial statement and ICFR audits | AS 2501.7 | |
| 3 | Investment Securities | The issuer recorded certain investment securities at fair value based on cash-flow models. The following deficiencies were identified: · The firm did not perform any substantive procedures to test certain required disclosures the issuer made under FASB ASC Topic 820 Fair Value Measurement. (AS 2301.08; AS 2501.07) Both financial statement and ICFR audits | AS 2301.8; AS 2501.7 | |
| 4 | Investment Securities | The issuer used a service organization for recordkeeping and processing of transactions related to certain other investment securities. The firm obtained a service auditor's report but did not assess how the controls that the service auditor tested related to the issuer's controls. Further the firm did not perform any procedures beyond inquiring of management to ascertain whether there were any changes in the service organization's controls from the date of this service auditor's report which was eight months before the issuer's year end. (AS 2201.B21 .B24 and .B25) Both financial statement and ICFR audits | AS 2201.B21; AS 2201.B24; AS 2201.B25 |
Issuer E2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Litigation Contingencies | With respect to a significant litigation matter that was included in the issuer's contingencies disclosure the following deficiencies were identified: · The firm selected for testing controls that consisted of the issuer's reviews of litigation contingencies. The firm did not evaluate the specific review procedures that the control owners performed to assess the appropriateness of the accounting for and disclosure of this litigation matter including the control owners' procedures to assess the degree of probability of an unfavorable outcome and the amount or range of potential loss. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | Significant risk |
| 2 | Litigation Contingencies | With respect to a significant litigation matter that was included in the issuer's contingencies disclosure the following deficiencies were identified: · The firm did not sufficiently evaluate whether the issuer's accounting for and disclosure of this litigation matter was appropriate in light of certain evidence the firm had obtained related to the probability of an unfavorable outcome and the amount or range of potential loss. (AS 2505.04; AS 2810.03) Both financial statement and ICFR audits | AS 2505.4; AS 2810.3 | Significant risk |
Issuer F2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Insurance-Related Liabilities | The issuer recorded a loss reserve for certain insurance claims that were reinsured. The following deficiencies were identified: · The firm did not identify and test any controls that addressed whether these insurance claims were valid and in compliance with the terms of the reinsurance agreement. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 2 | Insurance-Related Liabilities | The issuer recorded a loss reserve for certain insurance claims that were reinsured. The following deficiencies were identified: · The firm did not perform any substantive procedures to test whether these insurance claims were valid and in compliance with the terms of the reinsurance agreement. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 |
Issuer G5 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Investment Securities | The issuer used a service organization to perform recordkeeping and pricing for its available-for-sale securities. The firm selected for testing a control that consisted of the issuer's comparison of prices this service organization used to prices that the issuer obtained from an external pricing service. The firm did not evaluate the specific review procedures that the control owners performed to determine whether items identified for follow up were appropriately resolved. (AS 2201.42 and .44) ICFR audit only | AS 2201.42; AS 2201.44 | |
| 2 | Investment Securities | The issuer used a service organization to perform recordkeeping and pricing for its available-for-sale securities. The firm selected for testing a control that consisted of the issuer's comparison of prices this service organization used to prices that the issuer obtained from an external pricing service. The firm did not identify and test any controls over the accuracy and completeness of a system-generated report used in the operation of this control. (AS 2201.39) ICFR audit only | AS 2201.39 | |
| 3 | Allowance for Credit/Loan Losses | The issuer assigned a risk rating to each of its commercial loans. The loan risk rating was an important input in estimating the ACL for commercial loans collectively assessed for impairment. 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 commercial loans. The firm did not evaluate (1) the criteria the control owners used to select loans for review and (2) 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 loans. (AS 2201.42) ICFR audit only | AS 2201.42; AS 2201.44 | |
| 4 | Allowance for Credit/Loan Losses | The issuer assigned a risk rating to each of its commercial loans. The loan risk rating was an important input in estimating the ACL for commercial loans collectively assessed for impairment. 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 commercial loans. The firm did not identify and test any controls over the accuracy and completeness of certain loan information that the control owners used to select loans for review. (AS 2201.39) ICFR audit only | AS 2201.39 | |
| 5 | Journal Entries | The firm did not identify and test any controls that addressed the risk that certain types of journal entries could be posted to the issuer's general ledger system without review or approval. (AS 2201.39) ICFR audit only | AS 2201.39 |
Issuer H1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm's substantive procedures to test certain revenue included performing substantive analytical procedures. The firm did not determine whether the expectations used in these substantive analytical procedures were based on predictable relationships. Further the expectations the firm used were not sufficiently precise to identify differences that could be potential material misstatements individually or in the aggregate because the data used to develop the expectations did not address important factors that the issuer disclosed as having an effect on sales. (AS 2305.13 .14 and .17) Financial statement audit only | AS 2305.13; AS 2305.14; AS 2305.17 |
Issuer I1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The firm's substantive procedures to test certain revenue included selecting a sample of transactions for testing. The firm's sample was too small to provide sufficient appropriate audit evidence because in determining the sample size the firm did not take into account the allowable risk of incorrect acceptance. (AS 2315.16 .23 and .23A) Financial statement audit only | AS 2315.16; AS 2315.23; AS 2315.23A |
Issuer J1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer recognized certain revenue based on product volumes delivered to customers. The firm used volume data in its substantive testing of this revenue but did not perform any procedures to test or test any controls over the accuracy and completeness of these data. (AS 1105.10) Financial statement audit only | AS 1105.10 |
Issuer K1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Insurance-Related Liabilities | The issuer used a significant assumption to estimate certain of its insurance-related liabilities. The firm did not perform any procedures to test or test any controls over the accuracy and completeness of certain issuer-produced data that was used to develop this significant assumption. (AS 1105.10) Financial statement audit only | AS 1105.10 | Significant risk |
Issuer L1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Inventory | The issuer performed cycle counts of certain inventory. The firm selected for testing controls that included the issuer's reviews of the cycle count results. When testing the operating effectiveness of these controls the firm did not evaluate the specific review procedures that the control owners performed to investigate and resolve differences between the cycle counts and the quantities recorded in the issuer's inventory system. (AS 2201.44) ICFR audit only | AS 2201.44 |