ALLL / Auditors

---

Auditors

• Board

  CFO Corner — “ALLL” about CECL

  In this occasional feature, CFOs from financial institutions share their approaches to the ALLL and to the CECL transition, as well as advice for keeping the board informed about related matters. Here, Ronald S. Ohsberg, Senior Executive Vice President, Chief Financial Officer and Treasurer of The Washington Trust Company shares advice from his institution.

• Auditors

  Auditors vs. Examiners

  The mixed interest comes into play when we consider that institutions can release reserves directly into income. Auditors of banks may wish to see high profitability to appease shareholders, whereas examiners may wish to see a more conservative view of the institution’s ALLL.

• Documentation

  Presenting to Auditors

  Similar to presenting ALLL results to examiners, documentation is of the utmost importance in defending your ALLL methodology to auditors. Because the role of an auditor includes protecting shareholders, you must be able to transparently explain your methodology at the time of an audit and provide the proper documentation to ensure that your ALLL calculation is both objective and in line with guidance.