Presenting ALLL Results to Auditors
As with presenting ALLL results to examiners, documentation is key for presenting to auditors as well. Institutions must ensure they provide transparent documentation so that auditors can see the steps that went into the calculation and the logic behind any assumptions.
What’s more, the ALLL calculation should be supplemented by internal reports to further paint a picture of the portfolio and add defensibility. Auditors are meant to look after shareholder best interest, so if for instance you decide not to release reserves in periods of low loss, you should be able to support your decision by providing documentation on why a release was not merited.