Case Study Fifteen: SOX Compliance – Implementation of the Revenue Recognition Standard - ASC 606, and the Credit Losses Standard - ASC 326 (CECL) for a Regional Bank and SEC Reporting Company.

Details

A large regional bank and SEC reporting company required assistance implementing the requirements resulting from the new revenue recognition standard - ASC 606. The same bank later requested our assistance implementing the Credit Losses Standard - ASC 326 (CECL).

We were engaged to provide accounting & internal controls expertise, and leadership support to the Bank’s Executive and Management Teams to assist with implementation of new accounting standards.

Implementation efforts for the new revenue recognition standard - ASC 606, required us to interview operations leaders throughout banking operations to understand various revenue recognition practices. It also required in depth knowledge and understanding of the standards and guidance related to - ASC 606. We became knowledgeable and proficient in applying this guidance to the bank operations, with written documents defining the Bank’s implementation approach. External auditors, including the Partner from a recognized national firm, commented on the thoroughness of our work and documented conclusions. Various revenue recognition standards interpreted by the external auditors incorrectly were corrected by Bank Management through documented work and the Bank’s interpretations of the guidance.

Next, the Bank’s management team unanimously approved Accounting and Business Consultant’s (ABC) for a new engagement to implement the requirements resulting from the FASB’s new credit losses standard - ASC 326 (CECL). This project was not only complex, but highly technical. ABC’s IT systems audit, SOC 1, and SOC 2 expertise were extremely helpful. The project required research, requests for proposals, selection, and implementation of new systems with outside service providers. ABC’s project leadership and management skills yielded excellent results for the Bank and a smooth implementation process.