1. The Basel Committee on Banking Supervision (the Committee, or BCBS) is issuing this supplemental note to the Committee's 2014 guidance, External audits of banks (2014 guidance) to contribute to the high-quality audit of banks. This note deals with the audit of the expected credit loss (ECL) accounting estimate within the overall financial statement audit. ECL frameworks bring significant change for banks and their external auditors. High-quality implementation and ongoing application requires considerable effort from all involved parties - management, audit committees and external auditors [Monitoring the external auditor's work over ECL is one of the audit committee's key activities in this regard, along with monitoring the work of management and the internal audit function.].

2. The Committee is issuing this supplemental note to help banks' audit committees in their role of overseeing banks' external audits (including the audit work on ECL), which is one of their key responsibilities [Basel Committee on Banking Supervision, External audits of banks, March 2014, paragraph 19.]. The note does so by first setting out, in Part 1, the Committee's expectations for the external auditor, alongside questions that an audit committee may ask the external auditor. Part 2 then elaborates on those expectations in the context of key components of ECL (models, for example).