ABA-Key Takeaways From the 2021 AICPA National Conference.

ENPNewswire-October 7, 2021--ABA-Key Takeaways From the 2021 AICPA National Conference

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Release date- 06102021 - Last month, the American Institute of Certified Public Accountants held its annual conference on banks and savings institutions, which brought together all the key players in the bank accounting space, including the banking agencies, the Securities and Exchange Commission, the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, as well as large and small banks and audit firms.

It is a key forum for public statements from these institutions, and this year's conference included some items to note:

The allowance and PCAOB inspections

Glenn Tempro, who heads financial institution practice for PCAOB's Division of Registration and Inspections, said, 'One of the most frequent areas of audit defense deficiencies relate to auditing the allowance for the loan loss and other accounting estimates.' While Tempro listed many specific areas for which deficiencies in the audits were identified, there are additional issues that may be more challenging for banks. First, the failure to identify the assumptions used to determine the collateral fair value for loans that were individually evaluated for impairment. This may be additionally challenging in the current COVID-19 environment and the additional challenges it causes to getting appraisals. Second, while auditors reviewed credit meeting minutes to determine they occurred, the PCAOB identified the failure by the auditor to determine if the meeting accomplished the control function. This may mean more engagement and additional critiques from auditors related to credit meetings. After the PCAOB's presentation, I called them to clarify the comments and was told that the intention was to communicate there are still issues related to the allowance, but it is not necessarily getting worse, the issues are not specific to CECL, not are the specific to the new PCAOB auditing estimates standard that is in effect. That said, it remains something that ABA plans to monitor.

Part 363 thresholds

The FDIC's Interim Final Rule to Provide Temporary Relief from Part 363 Audit and Reporting Requirements, and whether the IFR might be extended beyond this year is top of mind for impacted banks. John Reiger, chief accountant at the FDIC, didn't mince...

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