Internal audit plays a crucial role in the ongoing maintenance and assessment of a bank’s internal controls, risk management, model risk management, governance systems, and processes. The adoption of the Current Expected Credit Loss (CECL) framework will change a financial firm’s approach and scope of its internal audits as the risk of a material misstatement due to model error is intensified. The skill set of audit teams will likely require a boost as CECL models are more complex than more previous models. Further, the materiality of the loan loss provision, the high level of judgment on key data, and assumptions brings these models into the spotlight.
Our professionals, comprised of quantitative, model, audit, credit, banking, and process experts with hands-on experience in supporting financial institutions audit teams, stand ready to assist in the following audit design, framework, and execution of procedures to review: