3 Considerations for Auditors and the Adoption of CECL
Auditors have been busy this year bringing their clients up to speed on the new Current Expected Credit Loss (CECL) standard requirements imposed by the Financial Accounting Standards Board (FASB). To assist in this process, Centri has compiled some considerations for auditors to keep in mind as they help their clients through the adoption of CECL.
- When complying with disclosure requirements as required per applicable standards, auditors must ensure that clients are aware of the analysis that is needed upon the adoption of a new accounting standard. Disclosures that will be made in the financials of the impact of the adoption of a new accounting standard require supporting documentation to support the relevant disclosures.
- For auditors, documentation is the key to providing an accountable and transparent service. Having a robust technical accounting memorandum sets auditors up for a smoother process to meet the related auditor documentation requirements and facilitates a clear understanding of the purpose, source, and conclusions reached in the performance of the auditor’s test procedures on the new standard being adopted.
- Maintaining independence as an auditor is crucial for providing a robust and irrefutable process and ensuring an unbiased and objective result. Auditors have a requirement to maintain independence and to not prepare original source documentation on behalf of their clients or make conclusions on their behalf.
As auditors navigate the complexities of assisting their clients in adopting CECL, they need to keep these 3 key considerations at the forefront of their minds and evident in the work they perform. Independence, documentation, and a proper disclosure process are of paramount importance.
How Centri Can Help
At Centri, our team of experts has the knowledge and expertise to prepare your client’s business to meet the requirements of CECL and other standards. Our experienced professionals can assist with the proper documentation process, ensuring a successful audit. Please contact us for more information or to explore how our expertise aligns with the specific needs of your clients.
Partner | Technical Accounting Practice Leader | CPA
Blake is a Partner at Centri Business Consulting and the leader of the firm’s Technical Accounting Practice. He has more than 18 years of public accounting experience. Throughout his career, Blake has worked with public,...
About Centri Business Consulting, LLC
Centri Business Consulting provides the highest quality advisory consulting services to its clients by being reliable and responsive to their needs. Centri provides companies with the expertise they need to meet their reporting demands. Centri specializes in financial reporting, internal controls, technical accounting research, valuation, mergers & acquisitions, and tax, CFO and HR advisory services for companies of various sizes and industries. From complex technical accounting transactions to monthly financial reporting, our professionals can offer any organization the specialized expertise and multilayered skillsets to ensure the project is completed timely and accurately.
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