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The Top Ten Topics for Audit Committees to Discuss with External Auditors in 2017


Following an active year of developments in the accounting world and regulatory environment, 2017 kicks off with a changing landscape of evolving regulations and politics. To prepare for the year ahead, audit committees should consider the following top 10 topics as you set your agendas and meet with your external auditors. Of course, all of these topics should be thoroughly discussed with management as well, but the focus here is on auditor dialogue. Collaboration with your auditors will not only help ensure an effective and more efficient audit process, but it can also provide an opportunity for them to serve as a sounding board as you look to operate an effective audit committee and address challenges.

Oversight - Implementation of CECL

The current expected credit loss (CECL) model certainly will not be a new topic for financial institution audit committee agendas, as it has been discussed for quite some time by all stakeholders as the standard was deliberated. With the standard finalized, it is now time for action. Both management and the audit committee should begin planning for implementation, if they have not started already.

With respect to the implementation plan in place, ask your external auditor:

  • What areas should you focus on to evaluate management’s implementation?
  • What are the auditor’s thoughts on the feasibility of management’s implementation plans and timelines?
  • Are there potential changes in lending practices and processes?
  • What are the new estimates that will be involved with CECL?
  • Does your management team have the resources needed to make this a successful implementation process?
  • What is your auditor’s view on key performance indicators, pooling loans, reasonable and supportable assumptions and average loan life?

Your external auditor has seen successes and challenges across many institutions with regard to CECL implementation – use this insight to your advantage.

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About the Authors

Heather Cozart has more than 17 years of combined experience in public accounting and in the financial services industry and is the office managing partner in the firm’s Raleigh, N.C., office. She serves clients ranging from de novo community banks to large multi-billion dollar regional banks, which include both private and publicly traded entities, as well as specialty finance companies and broker-dealers. She is experienced in the completion of quarterly and annual SEC filings, mergers and acquisitions, stock registration statements, Sarbanes-Oxley compliance, internal control documentation, employee benefit plans, SSAE 16 reporting, agreed-upon procedures, internal audit engagements and other special engagements. Heather also serves as a technical resource for the firm regarding SEC, PCAOB, broker-dealer and other public company matters.

Heather Cozart, Partner | DHG Financial Services
919.301.6716 |


Lindsay Schuster has more than eight years of public accounting experience. She is in charge of audit engagements for regional and community banks, including financial statement audits, internal control audits (Sarbanes-Oxley) and collective investment fund audits. In addition, Lindsay has experience with agreed-upon procedures, mergers and acquisitions, and HUD and trust fund audits for financial institutions.

Lindsay Schuster, Senior Manager | DHG Financial Services
919.301.6742 |

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