Yes, the auditor is correct. The loan origination fees will be capitalized and recognized over the life of the related loan.
Here is a link to the FASB 91 for your reference-
Let me know if you have any question.
Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.
You can capitalize the loan origination fees and amortize it as a separate expense or as part of interest expense and disclose that in your statement of accounting policy.