- Inspection year
- 2024
- Report date
- 21-Nov-2024
- PCAOB release
- 104-2025-010
- Audits reviewed
- 1
- Audits w/ Part I.A deficiencies
- 1
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 20
- Part I.B deficiencies
- 3
- Report
- View PDF ↗
Deficiencies (20)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A20 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Change Management | The issuer used certain information technology (IT) systems to initiate process and record transactions related to (1) fee and commission income and related receivables and (2) realized and unrealized gain and losses and interest income. The firm selected for testing certain IT change management controls over these IT systems that consisted of the review testing and approval of changes prior to their migration into production. The following deficiency was identified: · The firm did not perform procedures to test the design and operating effectiveness of a control related to user access beyond observation of one individual's attempt to log in to the production and development environments. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 2 | Change Management | The issuer used certain information technology (IT) systems to initiate process and record transactions related to (1) fee and commission income and related receivables and (2) realized and unrealized gain and losses and interest income. The firm selected for testing certain IT change management controls over these IT systems that consisted of the review testing and approval of changes prior to their migration into production. The following deficiency was identified: · The firm did not test or in the alternative identify and test any controls over the completeness of information that it used to make its selections for testing a control over change management. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 3 | Change Management | The issuer used certain information technology (IT) systems to initiate process and record transactions related to (1) fee and commission income and related receivables and (2) realized and unrealized gain and losses and interest income. The firm selected for testing certain IT change management controls over these IT systems that consisted of the review testing and approval of changes prior to their migration into production. The following deficiency was identified: · The firm selected for testing a control over change management for one of these systems but did not perform any procedures to determine whether the population of changes from which it made its selections for testing represented the complete population of changes made to this system. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 4 | Change Management | The issuer used certain information technology (IT) systems to initiate process and record transactions related to (1) fee and commission income and related receivables and (2) realized and unrealized gain and losses and interest income. The firm selected for testing certain IT change management controls over these IT systems that consisted of the review testing and approval of changes prior to their migration into production. The following deficiency was identified: · The firm did not identify and test a control to address the review and approval of changes other than configuration for certain of these systems. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 5 | Fee and Commission Income and Related Receivables | For fee and commission income and related receivables the following additional deficiency related to the firm's testing of controls and substantive testing were identified: · The firm selected for testing controls over the reconciliation and/or review of information related to fee and commission income and related receivables. The firm did not evaluate the review procedures that the control owners performed including the procedures to identify items for follow up and whether those items were appropriately resolved. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 6 | Fee and Commission Income and Related Receivables | For fee and commission income and related receivables the following additional deficiency related to the firm's testing of controls and substantive testing were identified: · As a result of the firm's ITGC testing deficiencies discussed above for fee and commission income and related receivables the firm did not perform procedures to test or sufficiently test controls over the accuracy and completeness of certain system-generated data the firm used in its substantive procedures. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 7 | Fee and Commission Income and Related Receivables | For fee and commission income and related receivables the following additional deficiency related to the firm's testing of controls and substantive testing were identified: · The firm did not perform procedures to test fee and commission income from non-related parties beyond comparing the amounts to issuer-produced information. (AS 2301.08 and .13) Both financial statement and ICFR audits | AS 2301.8; AS 2301.13 | |
| 8 | Fee and Commission Income and Related Receivables | For fee and commission income and related receivables the following additional deficiency related to the firm's testing of controls and substantive testing were identified: · The firm did not perform procedures to test the occurrence of fee and commission income from related parties beyond comparing the amounts to issuer-produced information and obtaining customer commission agreements. (AS 2301.08 and .13; AS 2410.12) Both financial statement and ICFR audits | AS 2301.8; AS 2301.13; AS 2410.12 | |
| 9 | Fee and Commission Income and Related Receivables | For fee and commission income and related receivables the following additional deficiency related to the firm's testing of controls and substantive testing were identified: · The firm did not perform procedures to evaluate the relevance and reliability of securities pricing obtained from external sources that it used to test the accuracy of fee and commission income from related parties. (AS 1105.04 and .06) Both financial statement and ICFR audits | AS 1105.4; AS 1105.6 | |
| 10 | Fee and Commission Income and Related Receivables | For fee and commission income and related receivables the following additional deficiency related to the firm's testing of controls and substantive testing were identified: · The firm did not identify and evaluate the issuer's omission of certain disclosures related to fee and commission income required by FASB ASC Topic 606 Revenue from Contracts with Customers. (AS 2810.30 and .31) Both financial statement and ICFR audits | AS 2810.30; AS 2810.31 | |
| 11 | Fee and Commission Income and Related Receivables | For fee and commission income and related receivables the following additional deficiency related to the firm's testing of controls and substantive testing were identified: · The firm did not perform procedures to test receivables due from a related party beyond confirming the amount with an individual who was an executive officer of the issuer and an employee of the related party. (AS 2410.12) Both financial statement and ICFR audits | AS 2410.12 | |
| 12 | Interest Income | For realized and unrealized gains and losses and interest income the following additional deficiency related to the firm's testing of controls and substantive testing were identified: · The firm selected for testing controls over the reconciliation and/or review of information related to realized and unrealized gains and losses and interest income. The firm did not evaluate the review procedures that the control owners performed including the procedures to identify items for follow up and the procedures to determine whether those items were appropriately resolved. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 13 | Interest Income | For realized and unrealized gains and losses and interest income the following additional deficiency related to the firm's testing of controls and substantive testing were identified: · The firm did not perform sufficient procedures to test realized gains and losses because it limited its procedures to recalculating the gains or losses for a sample of transactions based on issuer-produced information or information obtained from external sources. (AS 2301.08 and .13) Both financial statement and ICFR audits | AS 2301.8; AS 2301.13 | |
| 14 | Interest Income | For realized and unrealized gains and losses and interest income the following additional deficiency related to the firm's testing of controls and substantive testing were identified: · The firm did not perform any procedures to test the unrealized gains and losses at year end. (AS 2301.08 and .13) Both financial statement and ICFR audits | AS 2301.8; AS 2301.13 | |
| 15 | Interest Income | For realized and unrealized gains and losses and interest income the following additional deficiency related to the firm's testing of controls and substantive testing were identified: · The firm did not perform sufficient procedures to test interest income because it limited its procedures to recalculating interest income for a sample of transactions and tracing data used in the recalculation to information obtained from external sources. (AS 2301.08 and .13) Both financial statement and ICFR audits | AS 2301.8; AS 2301.13 | |
| 16 | Interest Income | For realized and unrealized gains and losses and interest income the following additional deficiency related to the firm's testing of controls and substantive testing were identified: · The firm did not perform procedures to evaluate the relevance and reliability of information it obtained from external sources that it used in its testing. (AS 1105.04 and .06) Both financial statement and ICFR audits | AS 1105.4; AS 1105.6 | |
| 17 | Interest Income | For realized and unrealized gains and losses and interest income the following additional deficiency related to the firm's testing of controls and substantive testing were identified: · The firm did not perform procedures to test or identify and test any controls over the accuracy and completeness of certain system-generated data used in the firm's testing. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 18 | Planned Divestiture of Certain Subsidiaries | The issuer planned to divest of its interest in certain subsidiaries. The firm did not identify and test a control that addressed whether the assets and liabilities of these subsidiaries met the held for sale criteria and should have been presented as discontinued operations in the financial statements in accordance with FASB ASC Topic 205 Presentation of Financial Statements. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 19 | Planned Divestiture of Certain Subsidiaries | The issuer planned to divest of its interest in certain subsidiaries. The firm did not perform substantive procedures to evaluate whether the assets and liabilities of these subsidiaries met the held for sale criteria and should have been presented as discontinued operations in the financial statements in accordance with FASB ASC Topic 205. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 | |
| 20 | Journal Entries | The firm identified fraud criteria for journal entries and obtained a listing of all journal entries that met the criteria. The firm did not perform sufficient substantive procedures to test those journal entries because it limited its procedures to certain journal entries without having an appropriate rationale. (AS 2401.61) Both financial statement and ICFR audits | AS 2401.61 |