Services: Our CECL solutions to meet your needs
Baker Tilly understands each situation is different, and what your team needs to implement the new CECL standard depends on many factors. CECL doesn’t specify a specific model, so companies are responsible for selecting, implementing and justifying the models they select. CECL implementations are an enterprise-wide activity, and it is expected that senior management, risk, legal, IT, etc. will all be involved. To provide you with the best options, our solutions are able to be customized to just those you need — at the level of involvement you want.
Educate your internal CECL team and key stakeholders to understand the new standard.
Your team will learn about the key pieces of the standard that will impact their day-to-day jobs. With the options available to your institution, you can choose to have a high level overview of the standard through a detailed workshop with examples.
Understand your current situation and what you need to address.
Our industry specialized professionals will analyze your processes, systems, controls, models and reports for gaps between what is currently in place and what will need to be done to comply. We advise on appropriate model selection for your business goals.
Segment your loan data to fit your institution’s loan portfolio risk.
You have a lot of data. It may seem overwhelming to determine how to segment and stratify your data for your modelling. Our team will work with you to evaluate your data, segment it appropriately and review the methodology with you to ensure it fits your bank. Most companies will find that they need additional data and more granularity to implement CECL, as well as modifications to their IT and regulatory reporting systems and controls.
Model selection and validation
Select appropriate model and test your modelling.
Once your organization has your models created, they will need to be validated. You will additionally need to test the modelling throughout the first two to three quarters it is run. Our professionals can assist you in performing model validation and help you understand any issue areas and how to adjust or remediate the model.
Governance, compliance and risk restructuring
Re-evaluate and enhance governance, compliance and risk policies.
Once your organization has created models, it will need to prepare and adopt updated governance, compliance and risk policies and procedures to govern the CECL models’ implementation and usage. Our professionals can assist you in restructuring your governance, compliance and risk policies and procedures under the new credit loss methodology.
Internal Controls Testing
Evaluate and test your internal controls over financial reporting (ICFR).
After your new processes are in place, internal controls need to be evaluated and tested for deficiencies in design, compliance with FDICIA and/or SOX requirements, and practical use effectiveness. Our professionals can assist you in evaluating governance, compliance and risk, documenting key processes and controls, and determining design and operating effectiveness.