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How Do I Prepare for a Financial Institution Audit?

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  • Written By: Kristie Lorette
  • Edited By: O. Wallace
  • Last Modified Date: 03 April 2014
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    Conjecture Corporation
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At least once a year, financial institutions, such as investment firms and banks, undergo a financial institution audit. The auditors come into the institution and review the files and records to ensure that the financial institution is abiding by the laws and regulations that are in place for these types of institutions. The best way to prepare for a financial institution audit is to keep your files and records up-to-date and in compliance with the laws and regulations throughout the year. This alleviates the need to have to rush around right before the audit occurs to get everything in order. If this is not the case, then you need to assign responsibilities to the appropriate parties for preparing for the audit, gathering up materials, schedule a meeting with the officers or executives of the institution, schedule the audit and then request any further records required.

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Each financial institution has employees that are in charge of certain records and pieces of paperwork that the auditors will be reviewing when conducting the financial institution audit. Typically, in a financial institution, it is the back office or operations department that maintains these records, so everything the auditors need to review should be in one place, if policies and procedures have been adhered to throughout the year. The employees that work in this area will not to act as the overseers of getting all of the files in order, which means that as they go through each file to make sure it contains the information it should. They may need to contact assistants, bankers, financial advisers or other employees of the financial institution to obtain any missing information.

As the company prepares for the financial institution audit, typically the principals or officers of the company have a meeting. The meeting typically provides them with a status update on how prepared the company is for the audit. The principals or executives may also play a part in nudging certain employees to step up to ensure the company is ready for the audit.

Typically, the auditors contact the financial institution to set a date for the financial institution audit. Then, the financial institution prepares for the audit once they know the date. If you have the privilege of preparing for the audit and then scheduling the date, then once you are ready or close to ready for the audit, you will need to contact the auditor to schedule the audit.

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