- Inspection year
- 2024
- Report date
- 26-Feb-2025
- PCAOB release
- 104-2025-039
- Audits reviewed
- 64
- Audits w/ Part I.A deficiencies
- 13
- Part I.A deficiency rate
- 20%
- Part I.A deficiencies
- 48
- Part I.B deficiencies
- 10
- Report
- View PDF ↗
Deficiencies (48)
Grouped by issuer and in the same order as the PCAOB report, so each item ties back directly to the source.
Issuer A10 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Business Combinations | During the year the issuer completed a business combination where the issuer's operations from before the transaction remained on the issuer's existing information systems (“legacy systems”) and continued to be recorded in these systems separately from the other company's operations. The issuer engaged a specialist to assist it in determining the fair value of the loans acquired and the deposits assumed in connection with the business combination. The firm selected for testing various controls over the acquired loans and assumed deposits data that were provided to and used by the company's specialist. The firm did not identify and test any controls over the accuracy and completeness of certain of the data from the legacy systems that were used in the operation of these controls. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | Significant risk |
| 2 | Allowance for Credit/Loan Losses | During the year the issuer completed a business combination where the issuer's operations from before the transaction remained on the issuer's existing information systems (“legacy systems”) and continued to be recorded in these systems separately from the other company's operations. The firm used certain loan data from the legacy systems in its testing of the ACL but did not perform any procedures to test or test any controls over the accuracy and completeness of these data. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 3 | Allowance for Credit/Loan Losses | During the year the issuer completed a business combination where the issuer's operations from before the transaction remained on the issuer's existing information systems (“legacy systems”) and continued to be recorded in these systems separately from the other company's operations. The issuer assigned certain loans a loan risk rating which was an important input in estimating the quantitative component of the ACL. 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 types of loans. The firm did not evaluate the criteria the control owners used to select loans for review. (AS 2201.42) Both financial statement and ICFR audits | AS 2201.42 | |
| 4 | Allowance for Credit/Loan Losses | During the year the issuer completed a business combination where the issuer's operations from before the transaction remained on the issuer's existing information systems (“legacy systems”) and continued to be recorded in these systems separately from the other company's operations. The issuer determined the qualitative reserve component of the ACL using qualitative factors and developed one of these factors using various data including appraisal data prepared by the company's specialists and certain external data. The following deficiencies were identified: · The firm selected for testing controls that consisted of the issuer's review of the ACL including an assessment of this qualitative factor for reasonableness. The firm did not evaluate the specific review procedures that the control owner performed to assess the reasonableness of this qualitative factor. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 5 | Allowance for Credit/Loan Losses | During the year the issuer completed a business combination where the issuer's operations from before the transaction remained on the issuer's existing information systems (“legacy systems”) and continued to be recorded in these systems separately from the other company's operations. The issuer determined the qualitative reserve component of the ACL using qualitative factors and developed one of these factors using various data including appraisal data prepared by the company's specialists and certain external data. The following deficiencies were identified: · The firm selected for testing controls that consisted of the issuer's review of the ACL including an assessment of this qualitative factor for reasonableness. The firm did not identify and test any controls over the accuracy and/or completeness of the appraisal and external data used to develop this factor. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 6 | Allowance for Credit/Loan Losses | During the year the issuer completed a business combination where the issuer's operations from before the transaction remained on the issuer's existing information systems (“legacy systems”) and continued to be recorded in these systems separately from the other company's operations. The issuer determined the qualitative reserve component of the ACL using qualitative factors and developed one of these factors using various data including appraisal data prepared by the company's specialists and certain external data. The following deficiencies were identified: · The firm's approach for substantively testing the qualitative component of the ACL was to test the issuer's process and the firm used an auditor-employed specialist to evaluate the methods and certain significant assumptions used by the issuer. The firm did not sufficiently evaluate the reasonableness of these significant assumptions because it did not identify that the auditor-employed specialist's procedures were limited to inquiring of management and reading an issuer-prepared memorandum. Further the firm used a sample of appraisal reports prepared by the company's specialists in its testing of these significant assumptions without performing any procedures with respect to its use of the work of the company's specialists as audit evidence. (AS 1105.A1 - .A10 AS 1201.C6 and .C7; AS 2501.16) Both financial statement and ICFR audits | AS 1105.A1; AS 1105.A10; AS 1105.A2; AS 1105.A3; AS 1105.A4; AS 1105.A5; AS 1105.A6; AS 1105.A7; AS 1105.A8; AS 1105.A9; AS 1201.C6; AS 1201.C7; AS 2501.16 | |
| 7 | Allowance for Credit/Loan Losses | During the year the issuer completed a business combination where the issuer's operations from before the transaction remained on the issuer's existing information systems (“legacy systems”) and continued to be recorded in these systems separately from the other company's operations. The issuer determined the qualitative reserve component of the ACL using qualitative factors and developed one of these factors using various data including appraisal data prepared by the company's specialists and certain external data. The following deficiencies were identified: · The firm used the appraisal and external data in its substantive testing of the qualitative component of the ACL but did not perform any procedures to test or test any controls over the accuracy and/or completeness of these data. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 8 | Investment Securities | During the year the issuer completed a business combination where the issuer's operations from before the transaction remained on the issuer's existing information systems (“legacy systems”) and continued to be recorded in these systems separately from the other company's operations. The issuer used a manually prepared spreadsheet to compare the fair values recorded for its available-for-sale and held-to-maturity securities to prices obtained from various sources. The firm selected for testing controls over the review of this spreadsheet but when evaluating the design of these controls did not identify that the control owner did not perform any procedures that addressed whether the pricing information that was included in the spreadsheet was accurate and complete. (AS 2201.42) Both financial statement and ICFR audits | AS 2201.42 | |
| 9 | Deposit Liabilities | During the year the issuer completed a business combination where the issuer's operations from before the transaction remained on the issuer's existing information systems (“legacy systems”) and continued to be recorded in these systems separately from the other company's operations. The issuer disclosed the size categories and maturity date of certain of its deposit liabilities. The following deficiencies were identified: · The firm selected for testing a control that consisted of the issuer's review of these disclosures but did not identify and test any controls over the accuracy and completeness of the information from the issuer's legacy systems that the control owners used in the operation of this control. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 10 | Deposit Liabilities | During the year the issuer completed a business combination where the issuer's operations from before the transaction remained on the issuer's existing information systems (“legacy systems”) and continued to be recorded in these systems separately from the other company's operations. The issuer disclosed the size categories and maturity date of certain of its deposit liabilities. The following deficiencies were identified: · The firm used this information in its substantive testing of these disclosures but did not perform any procedures to test or test controls over the accuracy and completeness of this information. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 |
Issuer B9 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Allowance for Credit/Loan Losses | The issuer reported loans receivable at two business units. The firm excluded from the scope of its audits the ACL related to one of these business units but did not evaluate whether the risks of material misstatement that the firm associated with the ACL subject to audit procedures also applied to the excluded ACL. (AS 2101.11 and .12; AS 2201.B10) Both financial statement and ICFR audits | AS 2101.11; AS 2101.12; AS 2201.B10 | Significant risk |
| 2 | Allowance for Credit/Loan Losses | With respect to the ACL subject to audit procedures: · The firm identified and tested controls that consisted of the issuer's review of the quantitative component of the ACL but did not identify and test any controls over certain inputs the control owners used in the operation of those controls. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | Significant risk |
| 3 | Allowance for Credit/Loan Losses | With respect to the ACL subject to audit procedures: · The firm did not identify and test any controls over the qualitative component of the ACL. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | Significant risk |
| 4 | Allowance for Credit/Loan Losses | With respect to the ACL subject to audit procedures: · The firm's approach for substantively testing the ACL was to test the issuer's process. The firm did not perform any procedures to evaluate the reasonableness of certain significant assumptions the issuer used to develop the quantitative component and any significant assumptions the issuer used to develop the qualitative component. (AS 2501.16) Both financial statement and ICFR audits | AS 2501.16 | Significant risk |
| 5 | Allowance for Credit/Loan Losses | During the year the issuer sold certain loans receivable to external parties. The firm did not identify and evaluate that the issuer's accounting for and presentation and disclosure of the gain on the sale of these loans was not in conformity with FASB ASC Topic 310 Receivables and FASB ASC Subtopic 860-20 Transfers and Servicing – Sales of Financial Assets. (AS 2810.30 and .31) In connection with our review the issuer reevaluated its accounting and presentation of this sale of loans receivable and determined that an error existed that had not been previously identified. The issuer did not file an amended Form 10-K or Form 8-K indicating that its previously issued financial statements should not be relied on. Instead the issuer adjusted this accounting and presentation in a subsequent filing. Both financial statement and ICFR audits | AS 2810.30; AS 2810.31 | Significant risk |
| 6 | Investment Securities | The issuer recorded certain investment securities at fair value based on cash-flow models and classified these securities as held-to-maturity (HTM). The following deficiencies were identified: · The firm selected for testing controls over the valuation of these securities including the issuer's review of its cash-flow models. The firm did not evaluate the specific review procedures that the control owners performed to assess the reasonableness of the values determined by these models. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 7 | Investment Securities | The issuer recorded certain investment securities at fair value based on cash-flow models and classified these securities as held-to-maturity (HTM). The following deficiencies were identified: · The firm did not perform any substantive procedures to test the valuation of these securities. (AS 2501.07) Both financial statement and ICFR audits | AS 2501.7 | |
| 8 | Investment Securities | The issuer recorded certain investment securities at fair value based on cash-flow models and classified these securities as held-to-maturity (HTM). The following deficiencies were identified: · The firm did not identify and test any controls that addressed whether the issuer's classification of these securities as HTM was appropriate. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 9 | Investment Securities | The issuer recorded certain investment securities at fair value based on cash-flow models and classified these securities as held-to-maturity (HTM). The following deficiencies were identified: · The firm did not perform any substantive procedures to evaluate whether the issuer's classification of these securities as HTM was appropriate. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 |
Issuer C7 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Deferred Revenue | The issuer used multiple information-technology (IT) systems to initiate process and record transactions related to revenue and deferred revenue. In its testing of controls over these accounts the firm tested various automated and IT-dependent manual controls that used data and reports generated or maintained by these IT systems. As a result of the following deficiencies in the firm's testing of IT general controls (ITGCs) the firm's testing of these automated and IT-dependent manual controls was not sufficient. (AS 2201.46) Both financial statement and ICFR audits | AS 2201.46 | |
| 2 | Deferred Revenue | The issuer used multiple information-technology (IT) systems to initiate process and record transactions related to revenue and deferred revenue. In its testing of controls over these accounts the firm tested various automated and IT-dependent manual controls that used data and reports generated or maintained by these IT systems. With respect to change management: The issuer had various change management processes for these IT systems including the use of a tool to manage and migrate changes into the production environment. The firm selected for testing controls over change management for certain systems including a control that consisted of the issuer's periodic review of access to the production environment. The following deficiencies were identified: · The firm did not evaluate the specific review procedures the control owner performed to determine whether user access to the production environment that had been previously granted continued to be appropriate. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 3 | Deferred Revenue | The issuer used multiple information-technology (IT) systems to initiate process and record transactions related to revenue and deferred revenue. In its testing of controls over these accounts the firm tested various automated and IT-dependent manual controls that used data and reports generated or maintained by these IT systems. With respect to change management: The issuer had various change management processes for these IT systems including the use of a tool to manage and migrate changes into the production environment. The firm selected for testing controls over change management for certain systems including a control that consisted of the issuer's periodic review of access to the production environment. The following deficiencies were identified: · The firm did not identify and test any controls over the accuracy and completeness of certain information that the control owners used in the operation of this control. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 4 | Deferred Revenue | The issuer used multiple information-technology (IT) systems to initiate process and record transactions related to revenue and deferred revenue. In its testing of controls over these accounts the firm tested various automated and IT-dependent manual controls that used data and reports generated or maintained by these IT systems. With respect to change management: The issuer had various change management processes for these IT systems including the use of a tool to manage and migrate changes into the production environment. The firm selected for testing controls over change management for certain systems including a control that consisted of the issuer's periodic review of access to the production environment. The following deficiencies were identified: · To test certain other change management controls the firm selected changes from the issuer's change management tool but did not test or test any controls over the completeness of the population of changes from which it selected its samples for testing. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 | |
| 5 | Deferred Revenue | The issuer used multiple information-technology (IT) systems to initiate process and record transactions related to revenue and deferred revenue. In its testing of controls over these accounts the firm tested various automated and IT-dependent manual controls that used data and reports generated or maintained by these IT systems. With respect to user access: · The firm selected for testing a control over user access for certain systems. The firm did not evaluate the specific review procedures the control owner performed to determine whether access was appropriately granted for the instances selected for testing. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 6 | Deferred Revenue | The issuer used multiple information-technology (IT) systems to initiate process and record transactions related to revenue and deferred revenue. In its testing of controls over these accounts the firm tested various automated and IT-dependent manual controls that used data and reports generated or maintained by these IT systems. With respect to user access: · The firm selected for testing a control over user access for certain systems. The firm did not identify and test any controls over the accuracy and completeness of certain 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 | Deferred Revenue | As a result of the firm's control testing deficiencies the firm did not perform sufficient substantive procedures to test certain revenue and deferred revenue because it did not test or sufficiently test controls over the accuracy and completeness of certain system-generated data or reports the firm used in its substantive testing including substantive analytical procedures. (AS 1105.10; AS 2305.16) Both financial statement and ICFR audits | AS 1105.10; AS 2305.16 |
Issuer D4 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | At two of the issuer's business units the issuer recognized certain revenue over time based on information that was provided by an external party. The following deficiencies were identified: · The firm did not identify and test any controls over the reliability of the information provided by the external party. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 2 | Revenue | At two of the issuer's business units the issuer recognized certain revenue over time based on information that was provided by an external party. The following deficiencies were identified: · The sample sizes the firm used in its substantive procedures to test this revenue were too small to provide sufficient appropriate audit evidence because these procedures were designed based on a level of control reliance that was not supported due to the deficiency in the firm's control testing discussed above. (AS 2301.16 .18 and .37; AS 2315.19 .23 and .23A) Both financial statement and ICFR audits | AS 2301.16; AS 2301.18; AS 2301.37; AS 2315.19; AS 2315.23; AS 2315.23A | |
| 3 | Revenue | At certain other business units the following deficiencies were identified: · The firm did not identify and test any controls that addressed whether the performance obligations had been satisfied before revenue was recognized. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 4 | Revenue | At certain other business units the following deficiencies were identified: · The firm did not perform substantive procedures beyond observing the issuer's processing of one revenue transaction to evaluate whether the performance obligations had been satisfied before revenue was recognized. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 |
Issuer E4 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. The issuer used company-employed specialists to determine the fair value of the acquired oil and gas properties based on discounted cash flows that they developed using various assumptions including future production volumes. The company's specialists used historical production data produced by the acquired business and certain other non-financial assumptions developed by the company's specialists to develop the future production volumes. The following deficiencies were identified: · The firm did not identify and test any controls over the reliability of the historical production data used by the company's specialists. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 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. The issuer used company-employed specialists to determine the fair value of the acquired oil and gas properties based on discounted cash flows that they developed using various assumptions including future production volumes. The company's specialists used historical production data produced by the acquired business and certain other non-financial assumptions developed by the company's specialists to develop the future production volumes. The following deficiencies were identified: · The firm selected for testing a control that included the issuer's review of the future production volumes assumption but did not evaluate the specific review procedures that the control owner performed to assess the reasonableness of certain significant non-financial assumptions that were developed and used by the company's specialists. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 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. The issuer used company-employed specialists to determine the fair value of the acquired oil and gas properties based on discounted cash flows that they developed using various assumptions including future production volumes. The company's specialists used historical production data produced by the acquired business and certain other non-financial assumptions developed by the company's specialists to develop the future production volumes. The following deficiencies were identified: · The firm did not evaluate the reliability of the historical production data used by the company's specialists. (AS 1105.A8a) Both financial statement and ICFR audits | AS 1105.A8a | |
| 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. The issuer used company-employed specialists to determine the fair value of the acquired oil and gas properties based on discounted cash flows that they developed using various assumptions including future production volumes. The company's specialists used historical production data produced by the acquired business and certain other non-financial assumptions developed by the company's specialists to develop the future production volumes. The following deficiencies were identified: · The firm did not perform procedures to evaluate the reasonableness of certain significant non-financial assumptions that were developed and used by the company's specialists beyond comparing the assumptions for the first year of the discounted cash flows for a selection of acquired properties to the historical production data of the acquired business and the issuer's other properties. (AS 1105.A8b) Both financial statement and ICFR audits | AS 1105.A8b |
Issuer F2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Long-Lived Assets | The issuer's policy was to group its property plant and equipment as a single asset group when evaluating its long-lived assets for possible impairment because the cash flows were interdependent. The following deficiencies were identified: · The firm selected for testing a control over the impairment of property plant and equipment which included the determination of its asset grouping. The firm did not evaluate the specific review procedures that the control owner performed to assess whether the issuer's use of a single asset group was in conformity with FASB ASC Topic 360 Property Plant and Equipment. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | |
| 2 | Long-Lived Assets | The issuer's policy was to group its property plant and equipment as a single asset group when evaluating its long-lived assets for possible impairment because the cash flows were interdependent. The following deficiencies were identified: · The firm did not perform substantive procedures beyond reading an issuer-prepared memorandum to evaluate whether the issuer's use of a single asset group was in conformity with FASB ASC Topic 360. (AS 2301.08) Both financial statement and ICFR audits | AS 2301.8 |
Issuer G3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Investments | The issuer held investments in multiple unconsolidated entities including certain entities that were managed by the issuer. The following deficiencies were identified: · The firm selected for testing a control over the issuer's disclosure of these investments. The firm did not identify and test any controls over the accuracy and completeness of an issuer-prepared schedule that the control owner used in the operation of this control. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 2 | Investments | The issuer held investments in multiple unconsolidated entities including certain entities that were managed by the issuer. The following deficiencies were identified: · The firm selected for testing a control over the valuation of the investments in unconsolidated entities managed by the issuer. The firm did not identify and test any controls over the accuracy and completeness of the unconsolidated entities' financial statements that the control owners used in the operation of this control. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | |
| 3 | Investments | The issuer held investments in multiple unconsolidated entities including certain entities that were managed by the issuer. The following deficiencies were identified: · The firm used the unconsolidated entities' financial statements and the issuer-prepared schedule in its substantive testing of these investments but did not perform any procedures to test or test any controls over the accuracy and completeness of this information. (AS 1105.10) Both financial statement and ICFR audits | AS 1105.10 |
Issuer H3 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer recognized certain revenue over time from contracts for which it had an enforceable right to payment for inventory that did not have an alternative use to the issuer. The issuer's IT system for this revenue was configured to recognize revenue upon shipment and the issuer recorded manual adjustments to recognize revenue at period end based on the progress it made to manufacture goods in inventory that had not been shipped. The firm selected for testing 1) an automated control that included the designation of sales orders in the system as “on hold” until the issuer completed a review of each sales order prior to shipment and 2) the control related to the issuer's review of each sales order with the “on hold” designation in the system to ensure it was associated with a valid contract. The following deficiencies were identified: · For the automated control the firm did not test the aspect that addressed whether all types of sales orders received this “on hold” designation. (AS 2201.42 and .44) ICFR audit only | AS 2201.42; AS 2201.44 | |
| 2 | Revenue | The issuer recognized certain revenue over time from contracts for which it had an enforceable right to payment for inventory that did not have an alternative use to the issuer. The issuer's IT system for this revenue was configured to recognize revenue upon shipment and the issuer recorded manual adjustments to recognize revenue at period end based on the progress it made to manufacture goods in inventory that had not been shipped. The firm selected for testing 1) an automated control that included the designation of sales orders in the system as “on hold” until the issuer completed a review of each sales order prior to shipment and 2) the control related to the issuer's review of each sales order with the “on hold” designation in the system to ensure it was associated with a valid contract. The following deficiencies were identified: · For the sales order review control the firm did not perform sufficient procedures to test the completeness of the population of items from which it selected its samples because it did not perform any procedures over the completeness of the population of sales orders associated with goods in inventory that the issuer had begun to manufacture. (AS 1105.10) ICFR audit only | AS 1105.10 | |
| 3 | Revenue | The issuer recognized certain revenue over time from contracts for which it had an enforceable right to payment for inventory that did not have an alternative use to the issuer. The issuer's IT system for this revenue was configured to recognize revenue upon shipment and the issuer recorded manual adjustments to recognize revenue at period end based on the progress it made to manufacture goods in inventory that had not been shipped. The firm selected for testing 1) an automated control that included the designation of sales orders in the system as “on hold” until the issuer completed a review of each sales order prior to shipment and 2) the control related to the issuer's review of each sales order with the “on hold” designation in the system to ensure it was associated with a valid contract. The following deficiencies were identified: · The firm identified a control deficiency related to the lack of a requirement for the sales order review control to be performed before the issuer began to manufacture the inventory. In determining whether the deficiency represented a material weakness the firm did not sufficiently evaluate the severity of this deficiency because (1) its procedures to evaluate the magnitude of the potential misstatement were limited to determining the total inventory amount that would represent a material misstatement and (2) the firm did not perform procedures to evaluate whether there was a reasonable possibility that the issuer's controls would fail to prevent or detect a misstatement beyond concluding that the possibility of that type of misstatement would be remote without performing procedures to support that conclusion. (AS 2201.62) ICFR audit only | AS 2201.62 |
Issuer I2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Goodwill | The issuer engaged a specialist to assist it in determining the fair value of its reporting units. The firm selected for testing controls that consisted of the issuer's determination of an expected range of reasonable outcomes for certain assumptions and comparison of those expected ranges to the assumptions determined by the company specialist. The firm did not evaluate beyond inquiry the procedures the control owner performed to determine the expected ranges. (AS 2201.42 and .44) ICFR audit only | AS 2201.42; AS 2201.44 | |
| 2 | Statement of Cash Flows | The firm selected for testing the issuer's control over the configuration of a system-generated report used in the preparation of its statement of cash flows. The firm did not evaluate the specific review procedures that the control owners performed to assess the configuration of this report. (AS 2201.42 and .44) ICFR audit only | AS 2201.42; AS 2201.44 |
Issuer J1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Allowance for Credit/Loan Losses | The firm's internal inspection program had inspected this audit and reviewed this area but did not identify the deficiencies below. The firm selected for testing controls that consisted of the issuer's review of the ACL including a committee's reviews of certain assumptions used to estimate the qualitative component. 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) ICFR audit only | AS 2201.42; AS 2201.44 |
Issuer K1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Allowance for Credit/Loan Losses | The firm selected for testing controls that consisted of the issuer's validation of the models it used to estimate the quantitative component of the ACL for loans and leases collectively evaluated for impairment. The issuer's validation included a comparison of the modeled results to the actual results that identified two types of errors and by design assessed one of these types of errors. In evaluating the design of these controls the firm did not evaluate the effect of the issuer not assessing one type of error on the controls' ability to effectively prevent or detect a material misstatement. (AS 2201.42) ICFR audit only | AS 2201.42 | Significant risk |
Issuer L1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Revenue | The issuer recognized certain revenue based in part on transaction data provided by an external service provider. The firm did not identify and test any controls that addressed the reliability of the majority of these data. (AS 2201.39) ICFR audit only | AS 2201.39 |
Issuer M1 deficiency
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Income Taxes | The firm did not perform any procedures to determine whether the issuer's presentation of a certain tax receivable as a current asset was appropriate. (AS 2301.08) Financial statement audit only | AS 2301.8 |