Expectation 5: The Committee expects that substantive procedures alone usually cannot provide sufficient appropriate audit evidence that ECL is free of material misstatement (and that the external auditor will want to place some level of reliance on internal controls over the ECL estimate). Therefore, the Committee expects that the external auditor will evaluate the design and implementation and test the operating effectiveness of internal controls on which the external auditor intends to rely.

48. The Committee expects that the external auditor will, as a minimum:

• evaluate the design of controls, determine that controls have been implemented, and test the operating effectiveness of controls over the ECL estimate, using suitable and available criteria - including controls related to governance and oversight, information systems and the key components of ECL;

• evaluate the control environments of those locations and processes where internal controls are applied and tested;

• evaluate the elements of internal control over the ECL estimate and determine whether they are:

o present and functioning in design, implementation and operation; and

o operating together in an integrated manner to achieve the entity's financial reporting objectives;