- Inspection year
- 2024
- Report date
- 27-Mar-2025
- PCAOB release
- 104-2025-052
- Audits reviewed
- 2
- Audits w/ Part I.A deficiencies
- 2
- Part I.A deficiency rate
- 100%
- Part I.A deficiencies
- 9
- Part I.B deficiencies
- 1
- Report
- View PDF ↗
Deficiencies (9)
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 | Allowance for Credit/Loan Losses | The issuer used a service organization to process and record transactions related to loans and for information it used to determine the ALL. In addition the issuer used data and reports from this service organization in the operation of certain controls the firm selected for testing. The firm did not evaluate whether the service auditor's report provided sufficient evidence because the firm did not assess the scope of the examination and applications covered the controls tested the way in which the tested controls related to the issuer's controls and the results for those tests of controls. (AS 2201.B21) Both financial statement and ICFR audits | AS 2201.B21 | Significant risk |
| 2 | Allowance for Credit/Loan Losses | The firm selected for testing a control over the review of the adequacy of the ALL. The firm did not evaluate the specific review procedures that the control owners performed to evaluate the reasonableness of certain assumptions used to determine the ALL. (AS 2201.42 and .44) Both financial statement and ICFR audits | AS 2201.42; AS 2201.44 | Significant risk |
| 3 | Allowance for Credit/Loan Losses | The firm selected for testing a control over the review of the adequacy of the ALL. The firm did not identify and test any controls over the appropriateness of the loan grades that were an important factor in estimating the ALL. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 | Significant risk |
| 4 | Allowance for Credit/Loan Losses | The firm's approach for substantively testing the ALL was to test the issuer's process. The following deficiencies were identified: · The firm did not perform sufficient procedures to evaluate the reasonableness of certain significant assumptions because the firm did not evaluate whether the issuer had a reasonable basis for these assumptions. Further the firm used certain external data to develop an expectation for the range of these significant assumptions but did not perform procedures to evaluate the relevance of this data. (AS 1105.04 and .06; AS 2501.16) Both financial statement and ICFR audits | AS 1105.4; AS 1105.6; AS 2501.16 | Significant risk |
| 5 | Allowance for Credit/Loan Losses | The firm's approach for substantively testing the ALL was to test the issuer's process. The following deficiencies were identified: · The firm did not perform any procedures to evaluate the reasonableness of certain other significant assumptions. (AS 2501.16) Both financial statement and ICFR audits | AS 2501.16 | Significant risk |
| 6 | Allowance for Credit/Loan Losses | The firm's approach for substantively testing the ALL was to test the issuer's process. The following deficiencies were identified: · The firm did not perform any procedures to test or in the alternative sufficiently test controls over the accuracy of certain data produced by the service organization and used by the issuer in estimating the ALL. (AS 2301.08 and .11) Both financial statement and ICFR audits | AS 2301.8; AS 2301.11 | Significant risk |
| 7 | Journal Entries | The firm did not identify and test any controls over journal entries to address the risk of management override of controls. (AS 2201.39) Both financial statement and ICFR audits | AS 2201.39 |
Issuer B2 deficiencies
| # | Area | Deficiency | Standard | Flags |
|---|---|---|---|---|
| 1 | Allowance for Credit/Loan Losses | The firm's approach for substantively testing the ALL was to test the issuer's process. The firm did not perform sufficient procedures to evaluate the reasonableness of certain significant assumptions because the firm did not evaluate whether the issuer had a reasonable basis for these assumptions. Further the firm used certain external data to develop an expectation for the range of these significant assumptions but did not perform procedures to evaluate the relevance of this data. (AS 1105.04 and .06; AS 2501.16) Financial statement audit only | AS 1105.4; AS 1105.6; AS 2501.16 | Significant risk |
| 2 | Allowance for Credit/Loan Losses | The firm's approach for substantively testing the ALL was to test the issuer's process. The issuer used certain data produced by its service organization to develop the ALL. The firm did not perform procedures to test the accuracy of this data. (AS 2301.08 and .11) Financial statement audit only | AS 2301.8; AS 2301.11 | Significant risk |