Under Pressure: The Shifting Landscape of Banking Regulations
Episode Description
Recent Wharton research analyzes how external auditors and bank regulations affect the discretion that banks have in loan loss provision estimates. More: http://knlg.net/2iWLv2f 📂 Finance & Accounting 🏷️ Research
Brief Summary
Allison Nicoletti discusses her research on Lomas provisions, auditor-regulator conflicts, and implications for banks and lending practices.
Key points
- The Lomas Provision Explained. Allison Nicoletti discusses the Lomas provision and its implications for banks.
- Regulator vs. Auditor Conflict. Nicoletti highlights the differing objectives of bank regulators and auditors.
- Impact of New Accounting Standards. The new accounting standards may affect how banks recognize loan losses.
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Episode highlights
- The Lomas Provision ExplainedAllison Nicoletti discusses the Lomas provision and its implications for banks.“It's one of the most important accruals banks make.”0:25May 22, 2017
- Regulator vs. Auditor ConflictNicoletti highlights the differing objectives of bank regulators and auditors.“Auditors are concerned about earnings management.”1:37May 22, 2017
- Impact of New Accounting StandardsThe new accounting standards may affect how banks recognize loan losses.“Banks will be recognizing losses over the life of the loan.”2:48May 22, 2017
