Expectation 3: The Committee expects that when identifying and assessing the ROMM relating to the audit of ECL, the external auditor will give particular focus to the following:

• understanding banks' lending business models (eg types of credit risk, underwriting criteria and changes thereto, lending periods and terms of collateral), risk appetite and exposures, credit risk management practices, business segments, geographical locations and the regulatory regimes [ISA 540 (Revised), Auditing Accounting Estimates and Related Disclosures, paragraph 13(c).] in which they operate;

• understanding banks' oversight and governance, competence of staff, information systems, processes and controls, given that ECL estimates will often involve multiple data sources, modelling, assumptions and judgments; and

• evaluating the risks in the broader context of the financial statements as a whole, including consideration of the regulatory factors, if any, that are relevant to accounting estimates of the bank, to make an overall assessment of the ROMM arising from the ECL financial statement line item in addition to considering more granular ROMM.