You are an audit manager for Lipske & Griffin, CPAs, who is completing the audit of Gold City Regional Banks ICFR for the year ended December 31, 2018. The report will be submitted to the engagement partner who reviews matters thoroughly and agreed with Gold Citys management that the entitys ICFR was not effective as of the end of the reporting period. Management identified a material weakness in Gold Citys system of ICFR with respect to ensuring the appropriate calculation of its allowance for loan losses. Specifically, during a process enhancement to the model that calculates the allowance for loan losses, the quarterly average loss rate was not annualized due to a computational error. Control procedures in place for reviewing the quantitative model for calculating the allowance for loan losses did not identify this error in a timely manner, and, as such, the Company did not have adequately designed procedures and a material misstatement could occur. Lipske & Griffin did obtain sufficient, competent evidence during the financial statement audit to provide reasonable assurance that the overall financial statements present fairly in accordance with GAAP.

Required: Draft a separate report for Gold Citys ICFR. LO