First due date: 1 May 2025
Revision dl: 1 June 2025
All date replicable in R
State the scope of the usage of AI type, version
Disclose any part of the data generated by the AI
Report due as the pubs publicaton (no, pdf, no words), please sent the links though Niezbednik
Use Bank.csv data
1.1 Idenify top 10 audit specialization within the bank audit industry in USA
1.2 Caluclate the fequency of types of the opinions by years and by types
1.3 Calculate distribution of audit fee and non audit fee by years
1.4 Provide distribution of the total audit and not audit free scaled by the audited total assets
1.5 Identify cosy that did not switched audit firm during the observation period, identify the banks, that most frequent changed the audit firm
1.6 Calculate for each bank the Planing Materiality
1.7 Rank the banks PD, create the rating, and calculate the transition matrix for the credit risk assessment 1.8 Assess AR for entire portfolio of the US banking sector
1.9 Classify the distribution of the internal system of controls based on the internal system efficiency opinions
1.10 Compare total value of assets audited over the total value of the asses, discuss the role of the off balance sheet assets and averaging
1.11 Construction and calculate the going concern model based on the financial ratios, types of the audit opinion, total audit fee, and level of the equity to total assets.
Select one bank form the US market that has the subsidiary in your host country import from the Edgar most recent consolidated financial statements. Assume that the bank has the extract the credit book (file Loan_Portfolio) execute the substantive testing on the portfolio, assuming that the bank provided both investment and trading books, on the sample from the Audit 2025_investment Trade, executed the trading portfolio program,
#Audit program
Program for the trading portfolio
Bank Trading Portfolio Audit Program
| Audit Objective | Audit Procedure | Testing Method | Sample Size/Selection | Working Paper Reference | Auditor Initials/Date | Comments/Findings |
|---|---|---|---|---|---|---|
| 1. Valuation Accuracy | 1.1. Verify the accuracy of pricing sources used for valuation (e.g., Bloomberg, Reuters). 1.2. Recalculate valuations using independent pricing sources for a sample of trades. 1.3. Assess the appropriateness of valuation models used for complex instruments. 1.4. Review the frequency and methodology of independent price verification (IPV). | Inspection, Recalculation, Analytical Review | Select a statistically significant sample of trades across different asset classes and complexity levels. Focus on high-value and illiquid instruments. | WP-VAL-01, WP-VAL-02, WP-VAL-03, WP-VAL-04 | ||
| 2. Risk Management Effectiveness | 2.1. Review the bank’s risk limits (e.g., VaR, stress testing limits) and verify compliance. 2.2. Assess the effectiveness of risk monitoring and reporting processes. 2.3. Evaluate the independence and adequacy of the risk management function. 2.4. Test the accuracy of risk calculations and stress testing results. 2.5. Verify that risk limits are appropriately approved and documented. | Inspection, Inquiry, Recalculation, Observation | Select a sample of risk reports, stress testing scenarios, and limit breach reports. Review documentation of risk management policies and procedures. | WP-RISK-01, WP-RISK-02, WP-RISK-03, WP-RISK-04, WP-RISK-05 | ||
| 3. Trade Execution and Settlement | 3.1. Verify the completeness and accuracy of trade capture. 3.2. Examine the segregation of duties between trading, settlement, and accounting. 3.3. Test the timeliness and accuracy of trade settlement processes. 3.4. Review the controls over trade amendments and cancellations. 3.5. Confirm trade details with counterparties for a sample of transactions. | Inspection, Confirmation, Recalculation | Select a representative sample of trades across different trading desks and asset classes. | WP-TRADE-01, WP-TRADE-02, WP-TRADE-03, WP-TRADE-04, WP-TRADE-05 | ||
| 4. Accounting and Financial Reporting | 4.1. Verify the accuracy of accounting entries related to trading activities. 4.2. Assess the compliance with relevant accounting standards (e.g., IFRS 9, ASC 820). 4.3. Review the disclosure of trading portfolio information in financial statements. 4.4. Test the accuracy of profit and loss calculations and attribution. 4.5. Review the reconciliation of trading system data with general ledger. | Inspection, Recalculation, Analytical Review | Select a sample of journal entries, financial reports, and reconciliations. | WP-ACCT-01, WP-ACCT-02, WP-ACCT-03, WP-ACCT-04, WP-ACCT-05 | ||
| 5. Regulatory Compliance | 5.1. Assess compliance with relevant regulatory requirements (e.g., Basel III, market conduct rules). 5.2. Review the bank’s policies and procedures for preventing market abuse. 5.3. Test the effectiveness of controls over regulatory reporting. 5.4. Review the documentation of regulatory approvals for new trading activities. | Inspection, Inquiry, Analytical Review | Review regulatory reports, compliance policies, and documentation of regulatory approvals. | WP-REG-01, WP-REG-02, WP-REG-03, WP-REG-04 | ||
| 6. IT Systems and Controls | 6.1. Evaluate the adequacy of IT controls over trading systems. 6.2. Review the change management process for trading systems. 6.3. Test the security and access controls over trading data. 6.4. Assess the business continuity planning for trading operations. 6.5. Verify the validation of data feeds from external sources. | Inspection, Inquiry, Testing, Observation | Review system documentation, change logs, and access control reports. | WP-IT-01, WP-IT-02, WP-IT-03, WP-IT-04, WP-IT-05 | ||
| 7. Counterparty Risk Management | 7.1. Review the process for assessing and monitoring counterparty credit risk. 7.2. Test the accuracy of credit limit calculations and monitoring. 7.3. Evaluate the effectiveness of collateral management processes. 7.4. Review the documentation of credit risk mitigation techniques (e.g., netting agreements). | Inspection, Recalculation, Analytical Review | Select a sample of counterparty credit files and collateral agreements. | WP-CP-01, WP-CP-02, WP-CP-03, WP-CP-04 |
Substantive Audit Program: Investments in Non-Controlled Entities
| Audit Objective | Audit Procedure | Testing Method | Sample Size/Selection | Working Paper Reference | Auditor Initials/Date | Comments/Findings |
|---|---|---|---|---|---|---|
| 1. Existence & Occurrence | 1.1. Obtain and review a schedule of non-controlled entity investments held by the bank. 1.2. Vouch selected investments to supporting documentation (e.g., investment agreements, share certificates, custodial statements). 1.3. Confirm investment balances and ownership with the investee company or custodian. 1.4. Inquire about any restrictions or encumbrances on the investments. | Inspection, Vouching, Confirmation, Inquiry | Select a sample of investments based on materiality and risk assessment. Focus on new investments, high-value investments, and those with unusual characteristics. | WP-EXIST-01, WP-EXIST-02, WP-EXIST-03, WP-EXIST-04 | ||
| 2. Completeness | 2.1. Perform analytical procedures to identify any missing investments (e.g., compare current portfolio to prior period). 2.2. Review minutes of board meetings and investment committee meetings for approvals of new investments. 2.3. Scan other accounting records for evidence of unrecorded investments. 2.4. Trace cash disbursements to investment accounts. | Analytical Review, Inspection, Scanning, Tracing | Consider all investment categories and select a variety of sources to verify completeness. | WP-COMPLETE-01, WP-COMPLETE-02, WP-COMPLETE-03, WP-COMPLETE-04 | ||
| 3. Valuation & Allocation | 3.1. Evaluate the appropriateness of the valuation method used (e.g., cost, equity, fair value). 3.2. Recalculate fair value using independent sources (if applicable). 3.3. Verify the accuracy of any impairment testing performed. 3.4. Confirm the correct application of accounting standards for equity method investments (if applicable). 3.5. Review documentation of impairment assessments. | Recalculation, Confirmation, Inspection | Select investments that are subject to fair value measurement and those that are considered to be impaired. | WP-VAL-01, WP-VAL-02, WP-VAL-03, WP-VAL-04, WP-IMPAIR-01 | ||
| 4. Rights & Obligations | 4.1. Review investment agreements to verify ownership rights and any related obligations (e.g., capital calls). 4.2. Inquire about any side agreements or contingent liabilities related to the investments. 4.3. Review legal documents and related documentation. | Inspection, Inquiry | Select a sample of investment agreements and legal documents. | WP-RIGHTS-01, WP-RIGHTS-02, WP-RIGHTS-03 | ||
| 5. Presentation & Disclosure | 5.1. Verify the accuracy and completeness of disclosures in the financial statements related to non-controlled entity investments. 5.2. Assess compliance with relevant accounting standards (e.g., IFRS, GAAP) and regulatory requirements. 5.3. Review management’s discussion and analysis (MD&A) for adequacy of disclosures. | Inspection, Analytical Review | Review relevant sections of the financial statements and supporting documentation. | WP-DISCLOSURE-01, WP-DISCLOSURE-02, WP-DISCLOSURE-03 | ||
| 6. Impairment Testing | 6.1. Review management’s process to determine and test impairment of investments. 6.2. Evaluate the appropriateness of the assumptions used in the impairment analysis. 6.3. Perform independent impairment testing where necessary. 6.4. Review for evidence of events that indicate an impairment. | Inspection, Recalculation, Analytical Review | Select investments which, through other tests, and analytical review, appear to be at risk for impairment. | WP-IMPAIR-01, WP-IMPAIR-02, WP-IMPAIR-03 | ||
| 7. Income and Loss Recognition | 7.1. Test the accuracy of the income and loss recognized from the investments. 7.2. Evaluate the proper application of accounting standards relating to investment returns. 7.3. Tie investment returns from sub-ledger to general ledger. 7.4. Review appropriateness of recording of dividend incomes. | Recalculation, Inspection, Tracing | Perform sampling of all forms of revenue generated from investments. | WP-INC-LOSS-01, WP-INC-LOSS-02, WP-INC-LOSS-03, WP-DIV-INC-01 |
| Audit Objective | Audit Procedure | Testing Method | Sample Size/Selection | Working Paper Reference | Auditor Initials/Date | Comments/Findings |
|---|---|---|---|---|---|---|
| 1. Existence & Occurrence | 1.1. Select a sample of loans from the loan portfolio and vouch to loan agreements, promissory notes, and supporting documentation. 1.2. Confirm loan balances and key terms with borrowers (direct confirmations). 1.3. Review loan disbursement records to verify actual disbursement of funds. 1.4. Perform physical inspection of loan collateral where feasible (e.g., real estate). | Vouching, Confirmation, Inspection, Review | Select a statistically significant sample based on risk assessment, loan size, and loan type. Include a mix of performing and non-performing loans. Focus on new loans. | WP-EXIST-01, WP-EXIST-02, WP-EXIST-03, WP-EXIST-04 | ||
| 2. Completeness | 2.1. Perform analytical procedures to identify any unrecorded loans (e.g., comparing loan growth trends to economic indicators). 2.2. Review loan application logs and approvals to identify loans that should have been recorded. 2.3. Scan other accounting records for evidence of unreported lending activities. 2.4. Trace loan repayments and fees back to the general ledger. | Analytical Review, Inspection, Scanning, Tracing | Include all loan types during scanning of accounting records. | WP-COMPLETE-01, WP-COMPLETE-02, WP-COMPLETE-03, WP-COMPLETE-04 | ||
| 3. Valuation & Allowance for Loan Losses (ALL) | 3.1. Evaluate the bank’s loan grading and risk rating process. 3.2. Recalculate the allowance for loan losses (ALL) using independent data and methodologies. 3.3. Review the adequacy of documentation supporting loan impairment assessments. 3.4. Test the accuracy of loan classification and provisioning calculations. 3.5. Evaluate the bank’s process for identifying and measuring expected credit losses. | Recalculation, Inspection, Analytical Review | Focus on loans classified as impaired, past due, or with high risk ratings. Select a sample of loss calculations. | WP-VAL-01, WP-ALL-01, WP-ALL-02, WP-IMPAIR-01, WP-IMPAIR-02 | ||
| 4. Rights & Obligations | 4.1. Review loan agreements for clauses that restrict or transfer ownership or collateral. 4.2. Inquire about any off-balance-sheet lending arrangements or commitments. 4.3. Review collateral documentation to verify the bank’s security interest. 4.4. Verify the appropriate processing and documentation of loan participations. | Inspection, Inquiry, Review | Select a sample of complex loan agreements and collateral documentation. | WP-RIGHTS-01, WP-RIGHTS-02, WP-RIGHTS-03, WP-PART-01 | ||
| 5. Presentation & Disclosure | 5.1. Verify the accuracy and completeness of disclosures in the financial statements regarding the credit portfolio and ALL. 5.2. Assess compliance with relevant accounting standards and regulatory requirements. 5.3. Review the bank’s disclosures related to credit risk management and its concentration risks. 5.4. Verify accuracy of information supplied for regulatory reports. | Inspection, Analytical Review | Review all related sections of the financial statements and required disclosures. | WP-DISCLOSURE-01, WP-DISCLOSURE-02, WP-DISCLOSURE-03, WP-REG-DIS-01 | ||
| 6. Credit Risk Management Processes | 6.1. Review the bank’s credit risk policies and procedures. 6.2. Evaluate the effectiveness of credit origination, approval, monitoring, and collection processes. 6.3. Review the bank’s credit risk reporting and early warning systems. 6.4. Review the effectiveness of the bank’s collateral monitoring processes. | Inspection, Inquiry, Observation | Select a sample of credit files and risk management reports. Observe and document the credit process. | WP-RISK-01, WP-RISK-02, WP-RISK-03, WP-RISK-04 | ||
| 7. Collateral Evaluation | 7.1. For sampled loans, review independent valuation of collateral. 7.2. Assess the frequency and adequacy of collateral re-evaluation. 7.3. Test perfection of security interest in the collateral. 7.4. Evaluate any third party involvement relating to collateral valuation. | Inspection, Recalculation, Confirmation | Concentrate sampling on secured loans with a high risk rating. | WP-COLLAT-01, WP-COLLAT-02, WP-COLLAT-03 | ||
| 8. Loan Classification and Provisioning | 8.1. Review all inputs into the banks loan loss models and the rationale behind those inputs. 8.2. Compare actual losses to projected losses. 8.3. Review the banks process for assessing probability of default and loss given default. | Inspection, Recalculation, Analytical Review | Review samples of loans in each class of risk ratings. | WP-CLASS-PROV-01, WP-CLASS-PROV-02, WP-CLASS-PROV-03 | ||
| 9. Related Party Lending | 9.1. Review all lending performed to related parties. 9.2. Ensure the proper approvals, documentation, and compliance with rules concerning related party lending. 9.3. Confirm balances, documentation and approvals relating to related party loans. | Inspection, Confirmation | All related party loans should be reviewed. | WP-RPT-01, WP-RPT-02, WP-RPT-03 |
| Due Diligence Area | Specific Procedures | Testing Method | Sample Size/Selection | Working Paper Reference | Responsible Party | Timeline | Comments/Findings |
|---|---|---|---|---|---|---|---|
| I. Legal & Regulatory | |||||||
| A. Corporate Structure | 1. Review articles, bylaws, shareholder agreements. 2. Assess board composition. 3. Verify registration. | Inspection, Review, Inquiry | Review all documents. Select representative board meeting minutes. | WP-LEGAL-A-01, WP-LEGAL-A-02 | Legal Counsel | Wk 1-2 | |
| B. Licensing & Permits | 1. Verify all required licenses. 2. Review compliance with space treaties. 3. Assess transferability. | Inspection, Review, Inquiry | Review all licenses. Select a sample of compliance reports. | WP-LEGAL-B-01, WP-LEGAL-B-02 | Legal Counsel | Wk 1-3 | |
| C. Intellectual Property | 1. Conduct IP audit. 2. Verify ownership and validity. 3. Review licensing agreements. | Inspection, Review, Vouching | Review all patents and key IP. Select a sample of licenses. | WP-LEGAL-C-01, WP-LEGAL-C-02 | IP Specialist | Wk 2-4 | |
| D. Contracts & Agreements | 1. Review customer/supplier contracts. 2. Identify change-of-control clauses. 3. Review govt. contracts. | Inspection, Review | Review all material contracts. | WP-LEGAL-D-01, WP-LEGAL-D-02 | Legal Counsel | Wk 3-5 | |
| E. Litigation & Compliance | 1. Review pending litigation. 2. Assess compliance with regulations. 3. Review insurance policies. | Inspection, Inquiry | Review all litigation files, compliance audits, and relevant insurance contracts. | WP-LEGAL-E-01, WP-LEGAL-E-02, WP-LEGAL-E-03 | Legal Counsel & Compliance Officer | Wk 4-6 | |
| F. Space Debris & Slots | 1. Review compliance with mitigation guidelines. 2. Verify orbital slot rights. | Review , Inspection | Review all documentation related to space debris mitigation. Review all orbital slot licenses. | WP-LEGAL-F-01, WP-LEGAL-F-02 | Regulatory expert | Wk 4-6 | |
| II. Technical Due Diligence | |||||||
| A. Technology Assessment | 1. Evaluate core technology. 2. Review specifications and tests. 3. Assess R&D capabilities. | Inspection, Review, Interviews | Review core tech documents. Interview R&D personnel. | WP-TECH-A-01, WP-TECH-A-02 | Technical Experts | Wk 3-5 | |
| B. Operations & Infrastructure | 1. Assess launch, satellite operations. 2. Review maintenance. 3. Assess capacity. | Inspection, Review, Observation | Observe operations. Review maintenance schedules, capability reports. | WP-TECH-B-01, WP-TECH-B-02 | Technical Experts | Wk 4-6 | |
| C. Data & Cybersecurity | 1. Evaluate data management. 2. Assess cyber vulnerability. 3. Review backup procedures. | Inspection, Review, Testing | Review cybersecurity policies. Test data system vulnerabilities. | WP-TECH-C-01, WP-TECH-C-02, WP-TECH-C-03 | IT Experts | Wk 5-7 | |
| D. Manufacturing & Supply | 1. Evaluate manufacturing. 2. Review supply chain stability. 3. Assess critical components. | Inspection, Review, Interviews | Inspect manufacturing facilities. Review supplier contracts. Interview key suppliers. | WP-TECH-D-01, WP-TECH-D-02, WP-TECH-D-03 | Manufacturing Expert | Wk 5-7 | |
| E. Space Weather & Mechanics | 1. Review space weather knowledge. 2. Review orbital tracking. | Inspection, Review | Review all documentation. Interview orbital mechanics team. | WP-TECH-E-01, WP-TECH-E-02 | Space Weather/Orbital Expert | Wk 5-7 | |
| III. Financial Due Diligence | |||||||
| A. Financial Statements | 1. Review audited statements. 2. Analyze key ratios. 3. Assess earnings quality. | Review, Analysis | Review last 3-5 years of statements. Select key financial ratios. | WP-FIN-A-01, WP-FIN-A-02 | Financial Analysts | Wk 2-4 | |
| B. Revenue & Market Analysis | 1. Evaluate revenue streams. 2. Assess market potential. 3. Analyze competitors. | Analysis, Review, Market Research | Analyze sales data. Perform market research. Interview customers. | WP-FIN-B-01, WP-FIN-B-02 | Market Analysts | Wk 3-5 | |
| C. Cost Structure & Profitability | 1. Analyze cost structure. 2. Assess profitability. 3. Review CAPEX plans. | Analysis, Review | Review cost breakdowns and capital expenditures. | WP-FIN-C-01, WP-FIN-C-02, WP-FIN-C-03 | Financial Analysts | Wk 4-6 | |
| D. Projections & Forecasts | 1. Review financial projections. 2. Assess reasonableness of assumptions. 3. Perform sensitivity analysis. | Review, Analysis | Review projections, assumptions, & sensitivity analyses. | WP-FIN-D-01, WP-FIN-D-02, WP-FIN-D-03 | Financial Analysts | Wk 5-7 | |
| E. Funding & Capitalization | 1. Review capital structure. 2. Assess past funding. 3. Review outstanding debt. | Review, Analysis | Review capitalization tables, debt agreements, past funding rounds. | WP-FIN-E-01, WP-FIN-E-02, WP-FIN-E-03 | Financial Analysts | Wk 6-8 | |
| IV. Commercial & Market | |||||||
| A. Market Positioning | 1. Assess competitive position. 2. Evaluate brand reputation. 3. Analyze sales strategies. | Market Research, Analysis | Review market reports and customer surveys. | WP-COMM-A-01, WP-COMM-A-02 | Market Analysts | Wk 3-5 | |
| B. Customer Analysis | 1. Review customer base. 2. Assess customer satisfaction. 3. Analyze customer contracts. | Interviews, Review | Interview a representative number of customers. Review customer contracts. | WP-COMM-B-01, WP-COMM-B-02 | Customer Analysis Team | Wk 4-6 | |
| C. Competitive Landscape | 1. Analyze competitors. 2. Assess competitive advantages. 3. Evaluate disruption risk. | Market Research, Competitive Analysis | Review competitor reports. Interview industry experts. | WP-COMM-C-01, WP-COMM-C-02 | Market Analysts & Competitors | Wk 5-7 | |
| D. Growth Opportunities | 1. Identify growth strategies. 2. Assess emerging trends. 3. Evaluate partnerships. | Market Research, Analysis, Interviews | Research potential markets and partners. Interview target management. | WP-COMM-D-01, WP-COMM-D-02, WP-COMM-D-03 | Growth Strategists | Wk 6-8 | |
| V. ESG Due Diligence | |||||||
| A. Environmental Impact | 1. Assess space debris. 2. Review compliance. 3. Evaluate sustainability. | Inspection, Review, Analysis | Review environmental reports. Conduct space debris risk analysis. | WP-ESG-A-01, WP-ESG-A-02 | Environmental Expert | Wk 5-7 | |
| B. Social Impact | 1. Assess social impact. 2. Review labor practices. | Review, Inspection | Review labor policies and conduct employee interviews. |