The financial services industry is undergoing significant change. This has added challenges for institutions assessing their operations and internal controls for regulatory considerations. Updated for 2019, this industry standard resource offers comprehensive, reliable accounting implementation guidance for preparers. It offers clear and practical guidance of audit and accounting issues, and in-depth coverage of audit considerations, including controls, fraud, risk assessment, and planning and execution of the audit.
Topics covered include:
- Transfers and servicing;
- Troubled debt restructurings;
- Financing receivables and the allowance for loan losses; and,
- Fair value accounting
The financial services industry is undergoing significant change. This has added challenges for institutions assessing their operations and internal controls for regulatory considerations. Updated for 2019, this industry standard resource offers comprehensive, reliable accounting implementation guidance for preparers. It offers clear and practical guidance of audit and accounting issues, and in-depth coverage of audit considerations, including controls, fraud, risk assessment, and planning and execution of the audit.
Topics covered include:
- Transfers and servicing;
- Troubled debt restructurings;
- Financing receivables and the allowance for loan losses; and,
- Fair value accounting
Table of Contents
Table of Contents xv
1 Industry Overview - Banks and Savings Institutions .01-.108
Description of Business .01-.07
Regulation and Oversight .08-.59
Regulatory Capital Matters .60-.81
Annual Independent Audits and Reporting Requirements .82-.107
Other Reporting Considerations .108
2 Industry Overview - Credit Unions .01-.62
Description of Business .01-.10
Charters, Bylaws, and Minutes .11-.17
Regulation and Oversight .18-.23
Regulatory Capital Matters .24-.54
Annual Audits .55-.62
3 Industry Overview - Finance Companies .01-.19
Description of Business .01-.11
Regulation and Oversight .12-.19
4 Industry Overview - Mortgage Companies .01-.42
Description of Business .01-.20
Regulation and Oversight .21-.37
Reporting Considerations .38-.42
HUD Programs .38-.40
Asset Servicing for Investors .41-.42
5 Audit Considerations and Certain Financial Reporting Matters .01-.267
Overview .01-.09
Terms of Engagement .10-.13
Audit Planning .14-.15
Materiality .16-.20
Use of Assertions in Assessment of Risks of Material Misstatement .21-.22
Risk Assessment Procedures .23-.75
Risk Assessment and the Design of Further Audit Procedures .76-.98
Evaluation of Misstatements Identified During the Audit .99-.101
Audit Documentation .102-.108
Using the Work of an Auditor’s Specialist .109-.114
Using the Work of a Management’s Specialist .115-.118
Processing of Transactions by Service Organizations .119-.121
Consideration of Fraud in a Financial Statement Audit .122-.150
Compliance With Laws and Regulations .151-.161
Going-Concern Considerations .162-.189
Written Representations .175
Information Other Than Financial Statements .200-.202
Certain Financial Reporting Matters .203-.221
Regulation and Supervision of Depository Institutions .222-.267
6 Cash and Cash Equivalents .01-.42
Introduction .01-.08
Accounting and Financial Reporting .09-.33
Auditing .34-.42
7 Investments in Debt and Equity Securities .01-.166
Introduction .01-.65
Regulatory Matters .66-.82
Accounting and Financial Reporting .83-.140
Auditing .141-.166
8 Loans .01-.230
Introduction .01-.56
Regulatory Matters .57-.88
Accounting and Financial Reporting .89-.181
Auditing .182-.230
9 Credit Losses .01-.111
Introduction .01-.22
Regulatory Matters .23-.37
Accounting and Financial Reporting .38-.61
Auditing .62-.111
10 Transfers and Servicing and Variable Interest Entities .01-.123
Introduction .01-.08
Regulatory Matters .09-.15
Accounting and Financial Reporting .16-.109
Auditing .110-.123
11 Real Estate Investments, Real Estate Owned, and Other Foreclosed Assets .01-.72
Introduction .01-.03
Regulatory Matters .04-.15
Accounting and Financial Reporting .16-.54
Auditing .55-.72
12 Other Assets, Other Liabilities, and Other Investments .01-.93
Introduction .01-.10
Regulatory Matters .11-.15
Accounting and Financial Reporting .16-.78
Auditing .79-.93
13 Deposits .01-.70
Introduction .01-.32
Regulatory Matters .33-.40
Accounting and Financial Reporting .41-.46
Auditing .47-.70
14 Federal Funds and Repurchase Agreements .01-.69
Introduction .01-.25
Regulatory Matters .26
Accounting and Financial Reporting .27-.47
Auditing .48-.69
15 Debt .01-.77
Introduction .01-.31
Regulatory Matters .32-.33
Accounting and Financial Reporting .34-.57
Auditing .58-.77
16 Income Taxes .01-.36
Introduction .01-.13
Regulatory Matters .14-.17
Accounting and Financial Reporting .18-.30
Auditing .31-.36
17 Equity and Disclosures Regarding Capital Matters .01-.115
Introduction .01
Banks and Savings Institutions .02-.46
Credit Unions .47-.64
Corporate Credit Unions .65-.79
Mortgage Companies and Mortgage Banking Activities .80-.84
Regulatory Capital Matters for All Entities .85-.88
Auditing .89-.115
18 Derivative Instruments: Futures, Forwards, Options, Swaps, and Other Derivative Instruments .01-.101
Introduction .01-.69
Regulatory Matters .70-.78
Accounting and Financial Reporting .79-.100
Auditing Considerations .101
19 Business Combinations .01-.41
Introduction .01
Regulatory Matters .02-.07
Accounting and Financial Reporting .08-.30
Auditing Considerations .31-.41
20 Fair Value .01-.71
Introduction .01
Accounting and Financial Reporting .02-.66
Auditing Considerations .67-.71
21 Trust and Asset Management Activities .01-.30
Introduction .01-.12
Regulatory Matters .13-.14
Accounting and Financial Reporting .15-.16
Auditing .17-.30
22 Insurance Activities .01-.70
Introduction .01-.10
Regulatory Matters .11
Accounting .12-.68
Auditing .69-.70
23 Reporting Considerations .01-.37
Introduction .01
Forming an Opinion on the Financial Statements .02-.04
Reports .05-.37
Appendix A - Illustrative Unqualified PCAOB Reports .37
Appendix
A FDI Act Reporting Requirements
B Regulatory Reporting Matters - Interpretation and Reporting Related to U.S. GAAP
C Information Sources
D Overview of Statements on Quality Control Standards
E The New Leases Standard: FASB ASC 842
F Accounting for Financial Instruments
G New Auditing Standards to Change the Auditor’s Report
H Schedule of Changes Made to the Text From the Previous Edition
Index of Pronouncements and Other Technical Guidance
Subject Index
